Orange juice inventories at the lowest levels in BR and hurricane in FL concern agents
The agents in the citrus market have been concerned about two recent events: hurricane Idalia, which hit Florida in late August (the third hurricane that hit the North-American State in less than a year), and the release of orange juice inventories at Brazilian processors, which, according to CitrusBR, are currently at the lowest levels since the beginning of the historical series, 12 years ago.
The agents in the citrus market have been concerned about two recent events: hurricane Idalia, which hit Florida in late August (the third hurricane that hit the North-American State in less than a year), and the release of orange juice inventories at Brazilian processors, which, according to CitrusBR, are currently at the lowest levels since the beginning of the historical series, 12 years ago.
According to CitrusBR, on June 30th, 2023, when the 2022/23 season ended, the ending stocks of Frozen Concentrate Orange Juice (FCOJ) Equivalent totaled 84.745 thousand tons, 40.7 % lower than that at the end of the previous season and 39.5 % below that estimated by CitrusBR in August last year.
The reasons for these low inventories are the lower number of fruits processed (because of the reduced crop and losses caused by the lack of labor for the harvest), lower yield of oranges (partially due to the harvest delay) and higher juice exports (majorly to the United States) compared to that last season – a reflex of lower production in Florida.
These figures have raised concerns about the world supply of orange juice. The output in the current season (2023/24) is not forecast to be high and may not be enough for a recovery in the volume stocked by Brazilian processors.
So far, CitrusBR has preferred not to estimate the ending stocks for the 23/24 season (in June 2024), due to the challenges related to brix levels, industrial yield and even the volume processed, which may change until the end of the season. However, Cepea calculations based on data from Fundecitrus released in May 2023 show that inventories will hardly be higher by the end of the season, scenario that may become worse if exports rise again and if yield is below the average. In this context, orange production in the Brazilian citrus belt (São Paulo and the Triângulo Mineiro) will have to be high in the coming season (2024/25) for inventories to recover, at least partially, in June 2025.