In recent months, the price of orange juice has soared to unprecedented heights, driven by significant increases in the cost of certain food commodities. This surge can be attributed to adverse weather conditions in Florida, Brazil, and Mexico, the world’s largest producers of orange juice. As a result, the price of orange juice on the market has jumped by double-digit percentages this year and has even skyrocketed by over 300% in the past two years. Unfortunately, experts predict that there is no immediate relief in sight.
The current price trend of frozen orange juice on the New York Stock Exchange has reached historic highs and continues to climb. As of Friday morning, it had already reached $3.90 (91 Kč) per pound (1 pound = 0.45 kg), representing an 80.5% year-on-year increase. Just two years ago, in October 2021, the price was hovering around $1.20, marking a surge of more than 300%.
This rapid price surge can be attributed to the lowest orange crop yield in Florida in the past 80 years. A series of detrimental events, including hurricanes Irma and Ian, unexpected January frosts, and the spread of a bacterial infection transmitted by the Asian citrus psyllid insect, which causes citrus greening, has significantly impacted the orange production in Florida.
This year, Florida is projected to produce only 28 million boxes of oranges, a significant decline compared to over 41 million boxes in the previous year, according to the U.S. Department of Agriculture. This marks the lowest harvest since 1943 and represents the fourth consecutive year of declining orange production in Florida.
The impact of low yields and citrus greening also extends to Brazil and Mexico, the first and third largest producers of orange juice in the world. Luis Ribera, an economist at Texas A&M AgriLife Extension Service, attributed the reduced productivity in Mexico to a period of drought and limited rainfall. However, the recovery of orange production to previous levels, particularly in Brazil, the largest global supplier of this commodity, is expected to take longer. Ribera warns that the following year will still be characterized by weak production.
Efforts to combat the citrus greening disease through various methods such as planting different varieties, genetic modifications, and the use of plant treatments have not yet proven successful. Currently, there is no proven solution, and the best approach for producers is to focus on enhanced fertilization and fumigation to care for their orchards.
The decrease in orange yields in the Americas may also impact the European Union, despite being the fourth largest producer of orange juice globally, as its production only covers approximately 15% of the EU’s demand. The majority of orange juice is imported, primarily from Brazil, which accounts for 90% of the EU’s orange juice imports. Other suppliers include Mexico, South Africa, Argentina, and Egypt, as reported by Mintec Global, a provider of global commodity price and market information for suppliers and food retailers.
The record-breaking surge in the price of orange juice presents a significant challenge for consumers and the industry alike. As the supply shortage persists, it is crucial to monitor the developments closely and explore potential solutions to mitigate the impact on consumers and ensure the availability of this beloved beverage.