According to estimates, the world’s largest exporter, Brazil, will have its lowest output in 36 years this year. The drought affecting the country and the emergence of diseases in orange crops are expected to significantly limit the production of orange juice to 232.4 million boxes from 288.2 million the previous year.
Production
According to Piraeus Bank’s monthly price report for August, the global production of concentrated orange juice for the period 2024-2025, according to the forecasts of the US Department of Agriculture, has been revised downwards, almost 3% less than the previous estimate, noting that Brazil’s orange production is forecast to shrink by 9%. However, analysts are not only concerned about Brazil’s production, which accounts for about 70% of total orange exports, but also the recent adverse weather conditions in hurricane-hit Florida, which could negatively affect the its production.
Already, the international price of orange juice has registered an increase of 42.8% in the last year, from 328.15 cents on the dollar to 468.5 cents, while just last week it set a historic record, reaching 525.15 cents per pound.
“Already the prices of juices have almost doubled, given that last year Brazil had a decrease of around 60%-65% of its production and Florida’s production also decreased, while this year’s production is estimated to be quite smaller”, he notes to “ET” the special advisor of the Association of Hellenic Enterprises Exporting, Trading in Fruits, Vegetables and Juices INCOFRUIT-HELLAS, Giorgos Polychronakis.
On the shelves
On the shelves of Greek supermarkets, the price of orange juice has increased in the last two years by 68.32%, from 1.2 euros at the end of 2021 to 2.02 euros per liter now, while three months ago it was 1.67 euro. The appreciation of the product is also reflected in the data of the Ministry of Development presented to the Council of Ministers on Wednesday, which show that the prices of fruit juices have increased by 15.5% on an annual basis.
Representatives of the supermarkets speaking to “ET” they warn of new revaluations. “This trend in orange juice has been going on for months, and to the extent that the large shortage is confirmed due to weather, but also crop disease in Latin America and Africa, it appears that the market price has run away. Therefore, we have seen increases in the last months and due to the insufficiency of the product we will see even more, without being able to determine their amount yet”, underlines the same source.
Change strategy
Companies in the sector are looking for ways to reduce production costs in order to put a brake on price increases. Since our country uses juice from both Greece, which is more acidic, and from Brazil, which is sweeter, for the preparation of the specific products, and seeing that there will be a shortage in the market, they are considering the promotion of mixed juices, with the addition of a larger amount apple juice. Already, some industries have reduced the orange juice content and added another fruit.
Downgrading
Market representatives report to “ET” that the other alternative that companies have is to downgrade the quality of their products, which of course entails the risk of losing consumers and, by extension, market shares.
It is noted that Greece produces about 8,000 tons of concentrated orange juice, which corresponds to only 0.7% of the world production, covering domestic needs through imports, and it covers its needs through imports.
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