Brazil accounts for three-quarters of global orange juice exports, therefore orange juice availability in the country remains a key price driver across global markets.
The Mintec Benchmark Prices (MBP) for Brazilian orange juice concentrate FOB was assessed at $5,880/ MT on the 31st of January, up 130.5% year-on-year (y-o-y), due to tight supplies.
According to the USDA, there will be a 2% y-o-y decrease in Brazilian orange juice concentrate production during the 2023/24 MY (July to June) to 1.1 million tonnes.
➡️ Market sources state that juice yields have been disappointing during the current MY, indicating inefficient fruit-to-juice conversion. Unseasonably low orange production, caused by untypically early harvests that took place to mitigate fruit loss by greening disease (HLB), has also directly impacted orange juice supplies.
➡️ Furthermore, the current situation is compounded by weak supply dynamics attributed to the three largest producers that control the bulk of Brazil's orange juice stock. These producers are currently not offering orange juice to the market due to the scarcity of supplies, highlighting supply chain tension amid reduced production levels.
➡️According to market sources, larger buyers are secured until the next crop, but some smaller buyers are only purchasing short-term supplies and, therefore more likely to be impacted by tight global supplies. Market sources expect orange juice demand to outstrip supply by June, as orange juice stocks dwindle. Demand erosion due to rising prices is prevalent in US and European markets. Brazil’s 2024/25 orange production is still uncertain; however, market sources have told Mintec that they expect it to be lower than the year prior.
The USDA projected a 1.3% y-o-y increase in global orange juice production for the 2023/24 MY, driven by a rise in output from the US, where orange juice production is anticipated to increase by 30% to 110,000tonnes, and Mexico, which expects an 11% increase to 155,000 tonnes. EU production is forecast stable at 47,000 tonnes.
However, global orange juice production in 2023/24 was 10% lower than the five-year average, and global demand remains robust, resulting in a bullish market sentiment.
