Despite being on track to finish at a 20% high, the 2022/23 orange harvest season will be remembered by the juice industry for the challenges of inelastic demand, at least in the first half of 2023.
European Union (EU), American, and Japanese bottlers will end 2022 by passing on the high prices of recent months to consumers. This trend is likely to continue as strong currencies depreciate against the dollar.
The shelves of these countries already show highs of 20% to 30% in prices. Rabobank’s picture in its Perspectives for 2023 shows another component besides the macroeconomy: the end of post-pandemic lockdowns.
Despite the resilience of new variants and the rise of covid cases, a mandatory return to homes is still not expected. The concern over vitamin C intake, boosted in 2020 and 2021 thanks to people’s desire to strengthen immunity, has been relaxed, points out the institution’s report.
All in all, Rabobank projects global consumption in the 22/23 cycle of 1.56 million tonnes of FCOJ juice, a further drop when compared to the 1.61 million tonnes equivalent in the 2021/22 cycle.
Not even lower inventories in Brazil and the US, as well as the lower production in Florida and Mexico, will ease prices.
See below the track record of the orange juice (hs codes 200910, 200911,200912,200919) exported from Brazil between Jan 2019 to Sep 2022. The data is from DataLiner.
Brazil’s harvest yields, measured at around 315 million boxes, after two subpar seasons due to bad weather in past winters, will also not be enough to replenish inventories.
Source: MoneyTimes