Orange juice price in Brazil has plummeted 5% in the first two weeks of June compared to the end of May 2019. Large orange juice stocks, reduced demand and estimations of an excellent crop in Brazil are the top rationales behind the price drop.
The Brazilian orange juice carry-in stocks for 2019/20 season are estimated at 224,518 tonnes, up 23,950 tonnes above the previous estimates for the current season. The overseas inventory and the carry-in stocks are forecast to range between 250,000 – 300,00 tonnes, which indicates high supply in the market. Secondly, exports to destinations such as the EU have reduced in the past month. Lastly, total processing from 236.8m boxes of oranges for 2018/19 season is estimated to be 875.172 tonnes in Brazil. In addition, the orange growing seasons in EU and Mexico are also expected to be good, and the supply-demand scenario is shifting towards the buyers’ market.
As a result, considering the current crop condition, stocks and exports, the supply of orange juice is projected to outweigh the global demand keeping the prices subdued in short to medium-term.