The Mintec price of US orange juice increased by 11% to USD 1.26/lbs in the 13-week period to 31st July, in line with higher retail sales. In addition, the lower supply for the upcoming season in Brazil and the start of the hurricane season in the US provides the orange juice market with additional bullish sentiment.
US demand for orange juice has been diminishing over the past decade due to a change in consumption habits. However, the recent coronavirus outbreak has halted the downward demand trajectory. Consumers across the US are responding to orange juices’ traditional reputation as a healthy beverage with key nutrients linked to improving the immune system.
Meanwhile, Brazil’s 2020/21 orange juice production, a top orange juice exporter to the US market, is forecast to reach 287.76 million boxes, 26% lower than the 2019/20 crop.
Furthermore, the US orange juice market is expected to see increased activity for the hurricane season this year, despite a large cloud of Saharan dust over the Atlantic currently delaying the early activity. The hurricane season usually peaks in early September and continues to impact the pricing of futures contracts.
The Mintec price of US orange juice is expected to stay firm over the next few months, in line with Florida now seeing another wave of coronavirus infections and orange juice sales continuing to be strong. Lower production in Brazil is expected to impact US imports and therefore potentially tighten supplies. Moreover, the hurricane season is likely to add an additional premium to the US orange juice price.