Rains reduce liquidity in the Brazilian citrus market; prices rise

The trading pace in the market of in natura orange was slow in Brazil in the first fortnight of October. Besides the lack of high quality fruits, rains in São Paulo State limited harvesting activities and lowered the available supply even more. Demand, in turn, was low too, mainly due to the Brazilian holiday on October 12, when liquidity usually decreases.

Purchasers reduced pear orange acquisitions, opting for lower priced varieties, such as valencia. From October 1 to 15, pear orange quotes averaged 32.90 BRL per 40.8-kilo box, on tree, 6.8 % up compared to that in the same period of September. Valencia oranges, however, were traded at 28.89 BRL per box, 8.9 % up in the same comparison.

Regarding tahiti lime, rainy weather hampered fieldwork and prices rose in the first fortnight of October. From Sept. 30 to Oct. 15, tahiti lime quotes averaged 81.98 BRL per 27-kilo box, harvested, 21.6 % up in the same comparison. Precipitation, on the other hand, should favor fruit growth on tree, based on the estimates for a slight supply increase this month.

2019/20 SEASON – The first purchase offers for the oranges from the 2019/20 crop have started to be reported in the market of São Paulo State. On an ad hoc basis, large-sized processors have bid prices around 22 BRL per 40.8-kilo box, harvested and delivered at processors, with the possibility of a bonus in the sales price of orange juice in the international market. Processors bidding prices have been lower than in the spot market this season (at 24 BRL per box for prompt-delivery).

In general, according to agents from processors, farmers are cautious regarding closing trades in advance, since the next season output is still uncertain. Although blossoming was considered positive in most orchards, the weather will be crucial for a good flower settlement – in the same period last year, many fruitlets were lost, reducing production in the 2018/19 season.

Besides, the result of the Presidential Election in Brazil may influence both the exchange rate and, consequently, the price received by processors for orange juice sales in the international market. The farmers consulted by Cepea that have already been contacted by processors, mainly for renegotiation, say they will wait for a better definition in the coming months to decide whether to sell or not their fruits.

Brazilian citrus farmers believe the next orange crop in São Paulo will have positive results, mainly in the orchards located in southern state, where the weather is more favorable (with rains interleaved with sunny days). Farmers are focused on the central area of the state, where intense heat and smaller rain volumes have already caused fruitlets to drop.