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ORANGE CROP UPDATES - Q3 2023

· BRAZIL

Growing conditions for the current 2023/24 crop in Brazil are favorable for the time of year and there has been some good rainfall recently. Brix levels are still low and juice yields are still poor, but both of these indices should improve as the dry season gets underway. However, the industry still wants the rain to continue in the near term to ensure a good bloom for the 2024/25 season.

The low carryover and lack of supplies for blending has meant that the processors are crushing the fruit early – some analysts suggest one month too early – which has led to low ratios of around 10-12. In addition, the processors are crushing the fruit hard which has led to high limonene levels and exacerbated the low ratio issue. It is very difficult to pin down pricing for Brazilian FCOJ and Brazil is only processing limited quantities to NFC this season.

 

· USA

The USDA did not release a report on Florida’s previous 2022/23 orange crop in August as usual. The final forecast from July pegged production at 15.85 million boxes. The non-Valencia (early, mid-season and Navel varieties) accounted for 6.15 million boxes and the Valencia portion was 9.70 million boxes.

There were also no independent forecasts on the forthcoming 2023/24 crop in August either, but industry sources suggest that production next season should
be somewhere between 15-30 million boxes.

· FUTURES

The frozen concentrated orange juice (FCOJ) futures has surged to new record highs over the past month. The sustained high pricing is mainly attributed to extremely low global stocks, particularly in top-producer Brazil, and it will take time to replenish the tank farms. Traders say that in the long term the high pricing should pull demand down enough to find an equilibrium, but there is no indication on when that will be or where price levels will be when a balance is found.

 

· MEXICO

The fruit maturation for the next crop in Mexico looks good and local producers say they expect output to increase by 25% on last season.

It has been raining in the citrus areas and the favorable conditions need to prevail to avoid fruit size limitations and/or fruit drop. There has been no trading of Mexican FCOJ and NFC recently and therefore no pricing. There are limited stocks of NFC OJ available.

Demand has been stable, and producers say there continues to be high demand for FCOJ across the globe. Mexican producers base their FCOJ pricing on the US futures market and the high prices on the futures.