Although orange juice production has risen in Florida and Brazil, falling demand in major markets like the US and Europe has brought the FCOJ (from concentrate orange juice) price down by US $600/ton in one year. A drop in the demand for orange juice alongside a recovery in processing production has led to lower market prices, according to a IHS Markit’s Agribusiness Intelligence (IHS Markit) report.
Brazil is no longer short of orange juice, IHS Markit reported, with a forecast 2019/20 orange crop of 388 million boxes. Brazilian orange juice yields have improved from a low of just over 300 boxes of fruit to one ton of FCOJ (from concentrate orange juice), meaning in 2018/19 the yield improved to 270 boxes/ton – however, these are said to be still lower than pre-disease figures seen at the turn of the century.
In contrast, NFC (not from concentrate) prices are rising in the US – in the last report of the season, they were recorded as US $8.55 per gallon, up from US $8.19 per gallon in the preceding month. However, demand still seems to be low in major markets, IHS Markit suggested, with sales of NFC orange juice, particularly in the US, continuing to fall.
IHS Markit has predicted that Brazilian orange juice prices are going to rise in late 2020, due to Europe needing to rebuild its FCOJ stocks and early indications of a potentially poor 2020/21 harvest (thanks to the damage caused by uncharacteristically hot weather).
Thanks to its partnership with a major global merchant firm to produce NFC orange and other fruit juices in China, which will be sold through a Chinese chain of coffee shops, IHS Markit has also predicted that China may enter the market in Brazil.