The Mexican orange crop in 2019/20 is anticipated to reach 2-2.1m tonnes, a cut down by 50-60% compared to the average crop in recent years following dry weather conditions in the country. Though the Mintec price has dropped 35% in the last quarter (Oct-Dec 2019) compared to the quarter before, the prices for Q4 2019 remain 57% higher than Q4 2018.
Mexico is the second-largest orange juice supplier globally and supplies most of its orange juice to the US. Currently, the orange juice prices in the US are extremely low as a result of the over supplied market with domestic orange juice. Thus, due to lacklustre demand from the top importer (US) and expensive oranges, only two or three processors in Mexico are receiving fruit, but daily deliveries are limited to approximately 300-500 tonnes. Most of the orange juice processors in Mexico have concluded to keep their factories closed for the current processing season, while others to restart their units only when better quality produce is available.
Besides, the stocks from the previous season are expected to be very low with the exception of few top processors holding some inventories. Therefore, considering all the above factors the orange juice prices in Mexico are expected to remain firm in H1 2020.