In the EU, orange production is anticipated to decline in the 2022/23 season, dropping from 6.7 million tonnes in the previous year to 5.9 million tonnes. The USDA estimates 831,000 tonnes of oranges will be processed in 2022/23, compared to 1.0 million tonnes in 2021/22. This fall in orange juice production is driven by less orange production and high fresh orange prices. Currently, on the Mintec Analytics platform, Spanish oranges [Mintec Code: 7A36] are priced at €1.20/kg, up 33% year-on-year. Spain is a major orange processor within the EU, followed by Italy; 20% of Spanish orange production is used for processing, primarily for fresh orange juice and other citrus by-products.
In the 2022/23 period, the demand for orange juice in the EU is expected by market sources to decline slightly, influenced by high food price inflation, price-sensitive consumers, and competition from alternative beverages and fruit juices. EU orange juice production can only meet approximately 15% of the domestic demand, relying on imports to fulfil the remaining 85%. Brazil is the dominant supplier, accounting for 90% of EU orange juice imports. Other suppliers of orange juice to the EU include Mexico, South Africa, Argentina, and Egypt.
The Mintec Benchmark Price for Brazilian orange juice concentrate [Mintec Code: FJ01] is currently at $3900/mt, marking a 78% year-on-year increase. This price rise is the result of a tight supply situation, with producers not feeling pressured to sell as they await negotiations and a position from European supermarkets. Market sources suggest that price levels of $3500 to $4000/mt would be reasonable for longer-term contracts.