ORANGE MARKET OVERVIEW

Considering the production in the Sao Paola Citrus Belt, Florida and Mexico, a decrease of 18% in production is expected compared to last season.

The main reasons for this are:

✅ A very long drought period and high temperatures have impacted the initial 20/21 yield forecast in Sao Paulo.

✅ In Florida the initial forecast was reduced due to more fruit losses than expected and smaller fruit size in the Non Valencias varieties.

✅ Although 98 MM boxes is larger than the 2019/20 crop year, it is still below the historical average. Climate conditions are the main issue.

SAO PAULO CITRUS BELT CLIMATE OVERVIEW

Their has been a significant reduction in rain volume in the region with a longer period of no rain lasting from March to November 2020. The temperatures are also increasing and the consequences can be seen in the pictures: plants deaths, small fruits, and drought trees (in the non-irrigated areas). Sao Paolo’s Northern region is the warmer part of the citrus belt and where most of the drought has affected the crop.

PROBABLE LOW PRODUCTION IN 21/22 TENDS TO UNDERPIN PRICES IN THE BRAZILIAN MARKET

After the low production in the 2020/21 season, agents expect a limited orange crop in 2021/22 in Sao Paulo State and the Triangulo Mineiro, due to unfavorable weather conditions. This scenario tends to underpin orange prices in 2021. Data from CitrusBR indicate that initial inventories in the 2021/22 season may be from 240 to 280 thousand tons in July/21. Although this volume is not lower than the strategic level established,the small harvest in the 2021/22 season may limit the volume by the end of the season, in June 2022.

20/21 is showing yield 18% lower than 19/20 crop year ** 421 MM boxes vs 515 MM boxes **