US cold storage of orange juice plunged to the lowest level in half a century after extreme weather in Florida and citrus greening damaged production. Dwlinidnig supplies boosted breakfast inflation as prices of orange juice hit record highs. There has since been a dramatic increase in the orange juice trade between the US and South America to balance out supplies.
Brazilian exports of orange juice to the US in the first four months of the season surged 58% from a year ago to a record 112,500 metric tons at the end of October, according to Bloomberg, citing data from Brazil’s Secretariat of Foreign Trade.
US ag traders are resorting to Brazil, one of the world’s top exporters of citrus, comes as US stockpiles of cold-stored orange juice plunged by 43% in September from a year earlier — the lowest level since 1977, according to the latest US Department of Agriculture data.
A combination of diseases across Florida’s citrus groves and Hurricane Ian destroyed crops are creating a supply crunch that has catapulted orange juice futures to record highs of more than $2 per pound.
We recently outlined “Orange Juice Prices Could “Increase Substantially” As Hurricane Pummels Florida’s Top Citrus Grow Region.” And that’s precisely what’s happening. So much so that demand exceeds supply boosting prices to record highs, and US ag traders resort to South South America to fill gaps.
Rabobank analyst Andres Padilla wrote in a recent note to clients that orange juice prices are set to rise 20-30% in US and Europe by early 2023.