Low production 2020/21 may underpin Brazilian fruit prices

Brazilian agents expect the São Paulo and Triângulo Mineiro region orange production to be low in the 2020/21 season. Although lower productivity constrains growers’ revenue, a smaller harvest tends to underpin the prices paid by the industry, despite higher ending stocks in June 2020.

In general, the biggest flowerings (observed in August) were considered positive by most of the growers consulted by Cepea. However, the dry and hot weather between September and October damaged plants and delayed their development during the fruit-fixing period. Besides, new flowerings (although occasional and smaller than that from August) were spotted in early December, favored by November rains.

This means tree development has been heterogeneous in the Brazilian citrus belt, even within a single region. However, it is worth to mention that the flower settlement period lasts until mid-January, which makes it difficult to measure the results for the coming season. Besides, the scenario is still uncertain and depends on the flowers that are now opening, the percentage of fixed fruitlet and fruits development in January.

Inventories
Higher orange production in the current season (2019/20) has allowed crushing to be high at the processors from São Paulo State. In this scenario, perspectives for June 2020 indicate higher inventories of Frozen Concentrate Orange Juice (FCOJ) Equivalent, possibly surpassing 400 thousand tons, according to Cepea estimates – higher than the strategic level. Isolated, this scenario may press down quotes at processors in the coming season, but, with the low production estimates for 2020/21 in São Paulo and the Triângulo Mineiro, quotes may continue firm.

Thus, an article on cepea.esalq.usp.br explains, in 2020/21, prices should be largely influenced by production – the agents consulted by Cepea believe the harvest will be smaller than 300 million boxes. If that is confirmed, this scenario may stabilize quotes in 2020, since it would keep the demand from processors high, and there would not be pressure on quotes in the in natura market.


Publication date:



Receive the daily newsletter in your email for free | Click here


Other news in this sector:


© FreshPlaza.com 2020

Sign up for our daily Newsletter and stay up to date with all the latest news!

Subscribe I am already a subscriber