As of 30th June 2023, Brazil's orange juice stocks stood at 85,000 tonnes, down 40% year-on-year (y-o-y) according to CitrusBR’s most recent report. The figure falls significantly below the 'technical minimum' of 200,000 tonnes, which is considered necessary for a stable transition into a new crop season. Market sources indicated that this situation is likely to lead to disruptions in the supply chain throughout the season, as the low juice stocks impose limitations on global trade.
European supermarkets have secured significant contracts focusing on meeting medium-term demands. However, reports suggest that major Brazilian producers are cautious about committing to extensive, long-term contracts, and further negotiations are expected to take place around mid-October.
In some European supermarkets, reports indicate a shortage of 100% pure orange juice. Market sources state that European demand for orange juice could decline by 20% due to elevated prices and the limited availability of juice on the global market.
The supply dynamics, especially in Brazil and Mexico, will be closely monitored in the coming months. Market sources have suggested that elevated prices are likely to persist in the next quarter; however, an equilibrium will be reached where demand is no longer sustained at a certain price, and market sources have indicated they are unsure what level this will be. The current Mintec Benchmark Price for Brazilian orange juice concentrate fob [Mintec Code: 4Q04] for September was $4,370/mt, up 107.1% y-o-y, at the highest level for the price series since it began in 1997.
