According to a recent Mintec Benchmark, the price of Brazilian orange juice rose by 30% during the month of September, eventually stabilizing in October at a price point 35% higher than the previous year. This price increase is generally attributed to the lack of available orange material within the key growing regions. Earlier this year, Brazil endured an unseasonal frost that swept through many of the nation’s most important citrus-producing areas. The damage from that event then combined with a period of sustained drought, which further decreased orange production. These issues caused Fundecitrus to reduce its orange crop forecast for São Paulo and the West-Southwest Minas Gerais citrus belt by 9%, which has huge implications for the rest of the orange oil industry.
As the world’s largest producer of both oranges and orange concentrates, Brazil has a massive influence on the global orange market, able to cause price fluctuations and price increases across a range of different products. Its recent supply limitations and upward pricing trends has resulted in the limitation of orange juice and orange concentrate production, which has an adverse effect on orange oil availability. CitrusBR currently estimates that juice production will only reach 170,000-190,000 tons in 2022, as compared to the 316,000+ tons of June 2021. Because orange oil is a byproduct of the juice industry, this massive reduction will exacerbate the already-difficult situation surrounding orange and orange derivatives. Berjé will continue to provide regular updates via our online Market Report.