Orange juice producers turn to alternative fruits amid record prices | Wilnesh News

orange juice price Production has climbed to record highs amid ongoing supply constraints, plunging the industry into crisis mode and forcing some manufacturers to consider alternative fruits.

Prices for the breakfast staple have been climbing rapidly in recent years, in part due to declining production in Florida, the main U.S. orange juice producer, and climate driven Extreme weather has occurred in Brazil’s main orange-producing areas.

The South American agricultural powerhouse is the world’s largest producer and exporter of orange juice, meaning it wields outsized influence in shaping the global industry.

Benchmark frozen concentrated orange juice futures trading on New York’s Intercontinental Exchange ended at Wednesday $4.77 per pound. That’s nearly double the price a year ago.

Harry Campbell, commodities market data analyst at research group Mintec, said soaring orange juice prices were forcing manufacturers and blenders to consider alternative juices to adapt to the situation.

“Many of them will change the amount of juice in their juice mix, less orange juice and more other juices like pear juice, apple juice, grape juice, so they become less dependent on orange juice,” Campbell told CNBC by phone.

“In the long term, this is indeed going to continue,” he added, noting that some players in the orange juice market have observed significant year-on-year declines in demand.

“Prices will continue to rise until consumers are no longer willing to pay a premium for orange juice because the supply is so low,” Campbell said.

Citrus Research Center warn More recently, last year’s high temperatures in Brazil meant the South American country could see one of its worst orange harvests in more than three decades.

In a report released on May 10, the Citrus Growers Organization predicted that Brazil will produce 232.4 million boxes of oranges (each box weighing approximately 40.8 kilograms) during the 2024-2025 season. Compared with the previous cycle, this was a decrease of 24%.

Analysts say Brazil typically produces about 300 million boxes of oranges, although climate change has significantly reduced crop yields. Climate change is causing extreme weather events More frequently and more intensely.

Fundecitrus said a series of intense heat waves in Brazil between September and November last year severely hampered production during the critical stages of flowering and early fruit formation.

A citrus disease known as greening, a tree disease with no current treatment that causes bitter, stunted fruit, is another headwind facing orange farmers. Analysts warn that the problem could wreak havoc on orange groves around the world for some time to come.

“Orange juice prices are rising because of the three D’s: drought, disease (and) demand,” Reiter Capital Investments LLC trader Dave Reiter told CNBC via email.

“When most people think of orange juice production, they think of Florida and California. In fact, Brazil is the largest producer of oranges and orange juice,” Leiter said.

“Most of Brazil’s orange juice production occurs in the states of São Paulo and Minas Gerais. These two regions have been battling weather problems and disease over the past few years.”

Wright described the benchmark orange juice futures contract as a thinly traded market, meaning it could lead to a round of “significant volatility.” He estimates the next orange juice price target is $5.16 per pound.