PRODUCTION
CITRUS UTILIZATION FOR PROCESSING
PRICES (WHOLESALE)
EXPORTS
IMPORTS
FCOJ
Last Update: May 2006
Overall, citrus production fell in 2004-05 from the previous season in the wake of much reduced citrus crops in Brazil and the United States, the world's largest producers. Orange production fell markedly in both countries. The rise in Mediterranean production was not sufficient to offset this decrease. World grapefruit production was severely curtailed by several hurricanes that ravaged groves in Florida and Cuba in September 2004. World citrus exports contracted moderately in the wake of smaller orange crops in Spain and the United States and lower shipments of grapefruit.
The 2005-2006 season: preliminary results and forecasts
World citrus output is expected to rise moderately in 2005-06. However, there are diverging trends across production regions. The Northern Hemisphere citrus season 2005-2006 is almost over and preliminary results show a fall in production mainly due to weather incidents. Orange production in the United States was some 3 percent below the low level of the 2004-05 season. There was a marked decrease in both Florida and California. Florida was hit again by hurricanes from August to October 2005. In addition to the damage directly caused by the winds, the hurricanes have spread the canker disease to many orchards. The grapefruit harvest rebounded from the very low level of season 2004-05 but was still less than half the crop of 2003-04. Similarly, the output of lemons and tangerines rose. In Mexico, dry weather conditions curtailed the orange harvest but a larger lime crop was expected.
In Europe a cool summer delayed the start of the citrus harvest. The yield of citrus trees in Spain continued to suffer from the severe frost of early 2005 and production of oranges and easy peelers fell markedly. In other Mediterranean countries output contracted slightly with the notable exception of Turkey (+6 percent). Citrus production fell in China due to cold weather and typhoons.
Conversely, good weather conditions are expected to raise citrus output in several large citrus producing countries of the Southern Hemisphere. A significantly larger orange crop is expected in Brazil in 2006. The USDA forecasts that it will exceed 18 million tonnes due to good weather conditions, the high year of the biannual citrus tree cycle and better management of the orchards due to higher fruit prices. Citrus output is expected to increase in South Africa due to better weather than in the previous season. Conversely, production is forecast down in Uruguay and Argentina (due to a long drought). The Australian citrus crop should remain almost unchanged from 2004-05.
World citrus exports are expected to contract moderately in 2005-06 from the previous season due to reduced supply. Shipments of fresh oranges should decrease in the United States in the wake of a smaller Californian crop, and in Argentina, while they are expected to remain almost unchanged in Spain, Italy, Egypt and South Africa. Conversely, they are forecast to grow in Greece, Turkey and Morocco. Shipments of tangerines should contract overall, as the rise in Morocco and Turkey is unlikely to offset the expected fall in Spain. Exports of fresh lemons and limes are forecast to increase slightly in Spain and Mexico but to contract in Argentina. Trade sources expect the quantities of grapefruits and pomelos sold overseas to remain similar to the low level of the previous season.
Prices for fresh oranges recovered partly in the Mediterranean region from the low level of the 2004-05 season. Prices of oranges for processing in the United States and Brazil were high throughout the year 2005 and in the first semester of 2006.
Production of orange juice declined in the two major producing countries (Brazil and United States) as a result of smaller orange crops in 2005. Juice production is expected to be lower than in the season 2004-05 in Spain, Italy and Mexico. According to press reports, the availability of orange juice was expected to contract by almost 9 percent in 2006.
Prices for Frozen Concentrated Orange Juice (FCOJ) have risen steadily since May 2005 owing to the shortage of oranges in Florida and Brazil. CIF prices in Rotterdam reached a record high of US$1 800/MT in May 2006, a 100 percent increase on the level of April 2005. Such a high level had not been observed for at least a decade. Similarly, future prices for FCOJ on the New York Commodity Exchange increased steadily from US$0.95 per pound to over US$1.50 per pound over the same period.
Trade sources expect a continuation of this trend in view of the low levels of stocks, the small orange harvest in Florida and the prospects for continued low supply in the United States and Brazil in the medium term. The citrus industry of both countries faces severe disease problems and competition from other sectors for land use. In the United States, the canker and greening diseases have spread and citrus land is being sold for real estate development. Brazilian orchards also suffer from these diseases and a new disease named Sudden Death has appeared recently. In addition, they have to compete for land and credit with sugar cane, which is currently seen as more profitable thanks to high ethanol prices. The price of not-from-concentrate orange juice has not enjoyed such a strong growth but market analysts expect it to increase in the coming months. However, production of oranges for processing in Brazil is forecast to rise during the summer 2006. Provided that hurricanes do not damage the Floridian crop, this may eventually put a cap on the FCOJ price increase towards the end of the year.
Prices for concentrated grapefruit juices have been high since hurricanes devastated Cuban and Floridian groves in 2004. Hurricanes hit these regions again in the summer 2005, causing severe damage to the trees. Cuban grapefruit groves were particularly affected by hurricanes Dennis and Emily in July 2005, while Florida was ravaged by hurricane Wilma in October 2005. Consequently, there was very scarce supply of grapefruit juice on international markets and prices remained at a high level throughout the season.
PRODUCTION
CITRUS UTILIZATION FOR PROCESSING
PRICES (WHOLESALE)
EXPORTS
IMPORTS
FCOJ
Last Update: May 2006
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