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Orange juice producers are considering targeting alternative fruits such as tangerines as wholesale prices “went bananas” amid fears of poor harvests in Brazil.
Prices of the citrus drink hit a new high of $4.95 (£3.88) a pound on commodity markets this week after growers in Brazil’s main orange-producing regions said they expected the harvest to be 24% lower compared to last year at 232 million 40.8-kg cases – worse than the previously forecast 15% decline.
Orange trees in Brazil are suffering from citrus greening, an incurable disease, after extreme heat stress and drought during their key flowering period in the second half of last year, fueled by the climate crisis.
The predicted weak crop in Brazil, which accounts for 70% of all orange juice exports, marks the third consecutive difficult global harvest. As well as problems in Brazil, Florida in the USA there were hit by a series of hurricanes and greening disease, which is spread by sap-sucking insects and turns the fruit bitter before killing the tree.
A string of poor harvests has limited growers’ ability to overcome current difficulties by blending the new crop with frozen juice – which typically has a two-year shelf life.
“This is a crisis,” Kees Cools, president of International Fruits and the Vegetable Juice Association (IFU), told the Financial Times. “We’ve never seen anything like it, even during the big cold snaps and the big hurricanes.”
The IFU said it is considering changing food regulations at the UN level so that orange juice can contain other citrus fruits, as well as changes within countries.
Francois Sonneville, senior beverage analyst at Rabobank, said consumer demand for orange juice was down by around a fifth compared to last year as the price had “jumped like a banana” and consumer habits had changed.
“The global orange juice industry is in crisis. The industry in Florida has all but disappeared, and Brazilian groves have been hit by disease, rising costs and unfavorable growing conditions, leaving world supplies of orange juice at their lowest point in decades,” he said.
Sonneville said beverage makers would either have to use lower-quality juice, create blended juices with other fruits such as apple, mango or grape, or charge consumers higher prices. He was skeptical that tangerines could be used to replace oranges, as this would add new costs to transporting the fruit to the processor.
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Problems will continue, he said, because it took a long time to plant new orange groves and farmers were considering other options as demand dwindled while facing disease problems and high labor costs in Florida.
“You will have to think carefully about planting a tree [that would last] for the next 25 years, because next year prices may be lower again,” Sonneville added.
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