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With orange juice prices at an all-time high and supply constraints, some producers are being forced to consider alternative fruits.
This is due to lower production in Florida, the main producer of orange juice in the US, and extreme weather caused by climate change in the main orange producing regions of Brazil.
South America’s agricultural powerhouse, Brazil is the world’s largest producer and exporter of orange juice, meaning it has a very influential role in shaping the global industry.
Frozen concentrated orange juice futures, traded on the Intercontinental Exchange in New York, were at $4.77 a pound on Wednesday. This is almost double the price recorded a year ago.
Harry Campbell, commodity market data analyst at research group Mintech, told CNBC that rising orange juice prices are forcing producers to look at alternative juices and adapt to the situation.
Many of them are expected to modify their products so that they reduce orange juice and increase other juices such as pear juice, apple juice and grape juice, thus reducing their reliance on orange juice.
The country’s extreme heat last year has put Brazil on track to record one of its worst orange harvests in more than three decades, with a local research center recently warning that prices are likely to remain high.
In a report released on May 10, Brazil forecast to produce 232.4 million oranges (weighing about 40.8 kilograms each) in the 2024 to 2025 season.
Although climate change has led to a significant decline in crop production, Brazil normally produces about 300 million oranges each cycle, analysts say.
Experts expect the next price target for orange juice to be $5.16 per pound.
