The average price of US orange concentrate (frozen ICE), rose 8.5% in the four weeks up to 19th January to USD 4.2/litre following record low production estimates for the 2021/22 MY. A recent report by the USDA forecasts Florida’s 2021/22 MY orange crop at 44.5 million boxes, a decline of 16% year-on-year (y-o-y). The forecast, if realised, would be the lowest harvest since 1945. This is largely attributed to an ongoing rise in fruit droppage due to citrus greening and adverse weather, which is expected to remain above average throughout the 2021/22 season.
The US orange market continues to be affected by citrus greening, a citrus plant disease spread by tree lice. Citrus greening poses elevated supply risks in Florida, the top orange producing state in the US, which is a key contributor to the tight supply estimate for the 2021/22 season. There is currently no effective fungicide or control measure that can eradicate the disease, and therefore growers are at risk of high losses. Accordingly, lower volumes of oranges are expected to be available for processing, thus acting as a bullish driver for the US orange juice market. Market participants have also reported lower juice yields, meaning larger volumes of oranges are required to produce the same quantity of output, adding additional costs for producers. This is combined with rising input costs and ongoing logistical disruptions, which are adding to the bullish impetus in the market. Tighter supplies combined with rising input costs, are expected to continue to drive orange juice prices in Q1 2022.