Orange Juice Prices Rise 14% Since June

Spend Matters welcomes this guest article by Jara Zicha of Mintec.

It is usually my weekend routine to enjoy a glass of freshly squeezed orange juice with my breakfast. As I revel in the orange juiciness, I always think how deliciously refreshing and sweet with that hint of bitterness the juice is. Of course, I never find myself thinking of supply/demand scenarios or how a drought in Florida could affect the price of my morning drink! Then again, if I were to buy orange juice in bulk, I would have noticed some interesting price developments over the past year or so.


Firstly, between June 2014 and July 2015, prices for frozen concentrated orange juice on the ICE fell by 30%, to $1.19 per pound, followed by prices climbing 11% between July and August. Although currently 4% below the 10-year average at $1.32 per pound, the price could continue rising.

Fundamentally, there are 2 factors currently driving the orange juice market. On one side, we have falling consumption while on the other we have falling production.

Orange juice consumption in the US has fallen by ⅓ over the past decade, largely down to healthier lifestyles. In the ‘70s, ‘80s and ‘90s, we were concerned with our daily dose of vitamin C, and orange juice was an easy provider. Recently though, we have become more aware of high sugar content in juices driving us toward the myriad of other options available to quench our thirst. There is a wider range of fresh juices, juice drinks, smoothies, energy drinks, flavored teas, sweetened waters, vitamin waters and so on, all of which have taken market share from orange juice. This is what caused the prices to fall in the second half of 2014.

This year though, the situation has changed somewhat. Production wise, the volume of orange juice produced in US has been on downward trend since 2003/04, with volumes falling annually by an average of 6%. This is largely down to a bacterial disease, called citrus greening, which has decimated orange production in Florida, the main growing state.

The fall in orange juice production has resulted in a growing supply deficit in the US as consumption exceeds US production. Although the fall in consumption has relieved some of the pressure on the market, the gap between production and consumption continues to increase. The shortfall has grown from 18,000 tonnes in 2011/12 to 229,000 tonnes in 2014/15.

Unsurprisingly, the deficit has been covered by imports, mainly from Brazil, which have increased by 38% since 2004/05. The problem now, though, is that production has been falling in Brazil as well, with the amount of oranges sent to processing this year down 16% year-on-year due to adverse weather and citrus greening. More importantly, orange juice stocks in Brazil have fallen to 40,000 tonnes, from over 300,000 tonnes last year.

Add in lower orange production in Europe this year due to the hot weather and it’s likely that orange juice prices will continue on an upward trend. So, enjoy your glass of orange juice before the price rises!

Discuss this:

Your email address will not be published. Required fields are marked *