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With Lower Production In FL, Brazilian Exportations Should Keep On The Rise
Oct 19, 2017

The Brazilian exportations of Frozen Concentrate Orange Juice (FCOJ) Equivalent have been at higher levels in the 2017/18 season (July to September/17) compared to the same period last crop. This scenario, already expected by agents from the sector, is due to higher Brazilian supply and firmer demand from the United States.

According to Secex, this season, Brazil has shipped 50.4 thousand tons of juice only to the United States, 12 % up compared to the same period last year. Brazilian juice exportations to the United States are expected to remain firm this crop. In the first official estimates regarding the 2017/18 season, released on October 12, the USDA confirmed production should be 21 % lower than in 2016/17, totaling 54 million boxes.

Besides problems with greening this season, citrus production from Florida, the main citrus producing state in the United States, was damaged by Irma hurricane, which hit groves in September, causing fruit drops and floods.

The smaller crop in Florida should lower the global orange juice supply even more. In Brazil, although productivity is almost 53 % higher than in the 2016/17 season, according to Fundecitrus (Citrus Defense Fund), the weather conditions this year may still affect the total volume. With the drought and high temperatures observed in September, many fruits wilted and crystalized at groves. In October, however, rains have dropped fruits of weak varieties, causing losses to growers from São Paulo State.

Besides, despite recovery of inventories in the 2017/18 season, estimated at 207.6 thousand tons, the low supply at Brazilian processors should only be softened. Therefore, Brazil should be aware of that scenario, mainly if production in the 2018/19 season is affected by the current weather.

EXPORTATIONS – From July to September this year, according to Secex, Brazil shipped 305.4 thousand tons of FCOJ Equivalent, 12 % up compared to the same period of 2016. Revenue rose 19 %, totaling 537.5 million USD. In Real, revenue totaled 1.69 billion BRL, 16 % up in the same comparison. For the European Union, sales totaled 200.9 thousand tons of orange juice, 5 % up compared to that in the same period last year. Revenue totaled 349.8 million USD, 11 % up in the same comparison. In Real, it totaled 1.10 billion BRL, 8 % up in the period.

DOMESTIC MARKET – The demand for oranges was low in the domestic market in the first fortnight of October. According to growers consulted by Cepea, the Brazilian Holiday on October 12, as well as the large volumes sold in the first week of the month, which reduced the supply needs from purchasers, may have affected sales. With lower supply of fruits with quality standards demanded by the in natura market, however, prices increased. Between October 1 and 13, pear orange quotes averaged 19.37 BRL per 40.8-kilo box, on tree, 19 % up compared to the first fortnight of September (1 – 15).

TAHITI LIME – Tahiti lime quotes reached 100.00 BRL per 27-kilo box, harvested, in the first fortnight of October, pushed up by the replenishing needs of growers, since harvesting was interrupted by rains, reducing availability in São Paulo State even more. Between October 1 and 13, tahiti lime quotes averaged 81.75 BRL per 27-kilo box, harvested, a staggering 63.5% up against that in the first fortnight of September (1 – 15).

Exportations of tahiti lime from SP State continued limited by high domestic prices, which reduced fruit competitiveness in the international market. Thus, Cepea collaborators believe shipments may intensify again only in November – as local supply should increase.

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