The orange beverage prices have soared but might become even more pricey soon. Since late 2021, New York concentrate orange juice futures, which tracks juice price in the United States, have increased fourfold. On September 9th, they reached an intraday high of $5.80 per pound, setting five records in a row.
Orange growth in Florida, which was once the second-biggest grower in the world, has withered by 92% in the last 20 years due to pests, hurricanes, and rising expenses. The fresh fruit industry is primarily supplied by other growers, mainly in Mexico and Spain. That leaves Brazil, which produces 70% of the world’s goods and exports a comparable amount. And now it’s having problems too.
Following an extremely hot flowering season, producers in São Paulo, Brazil’s principal orange-producing state, predicted in May that the production this year would decrease by 24% from the previous year. Citrus greening, an incurable bacterial disease that first makes oranges sour and then kills the tree, was another problem farmers had to deal with.
Even that prediction seems optimistic now. The drought in Brazil is worsening; in certain areas of São Paulo, there hasn’t been any rain in four months. The state’s greening is out of control; two thirds of the trees are affected in large areas. Larger farmers can afford to use insecticides or nets to safeguard their orchards. Removing potentially unhealthy trees by rooting them is the only remedy for smaller ones. Since many people would rather keep their groves in the ground due to high prices, illnesses continue.
This year’s harvest is doomed because harm has already been done in many fields. These could be even worse than the others. Since it takes four years for new trees to bear fruit, they might also experience greening. Again, droughts might reduce harvests. Planting in other areas can be beneficial, but development is extremely slow because good locations are too far from juice plants and lack access to water. Some farmers might choose to cultivate sugar cane or other less hazardous crops instead of oranges.
Despite high prices, global demand for fruit juice remains strong because consumers are wealthy enough to pay more. This may increase producers’ profits slightly, but not by much, as they also face higher costs. Shortages may begin soon, possibly outside the US and Europe, which will be prioritized by retailers as the biggest markets for orange juice. Without a miracle, things look rotten for vitamin C seekers.
Source: Economist
