Citrus Prices - A Stan Klos Website
1. FRESH CITRUS
2003-2004 season in the Northern Hemisphere
Mediterranean citrus production declined (-5%) to 16.2 million tonnes in
2003-04 from the previous season in spite of a very large Spanish harvest.
Output fell markedly in Greece (due to frost), and, to a lesser extent, in Italy
(due to drought in the summer 2003) and Morocco. The orange output of the
Northern Hemisphere expanded, as reduced harvests in Greece, Morocco and Israel
were more than compensated by higher production in the United States (where it
reached a record high), Spain and Mexico. Similarly, the Northern Hemisphere's
tangerine crop was larger, with increases in Spain and Morocco. Lemon production
increased in Spain and Mexico but fell in Turkey, Italy, Greece and the United
States. Grapefruit output rose in Turkey and the United States but contracted
slightly in Israel.
Exports of citrus from the Mediterranean rim remained almost unchanged from
the previous season at 5.75 million tonnes. The large crop led Spain to ship a
record volume of 3.4 million tonnes in 2003-04 (+5% from the previous season).
Conversely, shipments fell in Morocco due to strong domestic demand for oranges,
in Greece due to reduced export availability and in Turkey due to reduced demand
in Russia and Eastern Europe. Exports of fresh citrus rose moderately in Israel,
Egypt and Mexico, but expanded more strongly in the United States owing to the
more favourable exchange rate of the US dollar. The good quality of Florida
grapefruits fuelled an increase in exports, notably to Japan.
Forecast harvest in the Southern Hemisphere in 2004
Output of citrus is expected to rise in Brazil in 2004 due to a large orange
crop. Estimates of the harvest vary significantly across sources, but according
to USDA, the total orange crop will be close to 450 million 40.8 kg-boxes, up 22
percent from the previous year. Similarly, the South African citrus harvest is
expected to be slightly up on the previous year, mainly due to an increase in
lemon production that will more than offset a fall in grapefruit output. As a
result, its exports of lemons should rise. Conversely, a smaller citrus harvest
is expected in Argentina where drought has severely curtailed lemon production.
Exports of lemons and grapefruit are likely to be down in the second semester of
2004. In addition, Argentinean citrus exports to the European Community may be
hampered by stronger phytosanitary rules. Australia forecasts a smaller orange
crop, which will reduce exports.
Prices
Citrus prices showed different trends across markets and products in 2003-04. In
the European Community (EC), wholesale prices increased from the previous season
for fresh oranges but decreased for lemons and grapefruit. Wholesale prices for
easy peelers were high at the start of the season (October-November) but then
dropped markedly, in particular for Spanish clementines due to quality problems.
In the United States, wholesale prices for fresh oranges rose due to the
excellent quality of Californian fruit, while lemon prices were stable. However,
grower prices for processing oranges fell to a low level due to the record
orange harvest in Florida and declining consumption of orange juice. The prices
of grapefruit for processing suffered a similar trend.
2. Orange juice
Production of Frozen Concentrated Orange Juice (FCOJ) is expected to soar in the
United States as a result of a bumper harvest in Florida, where the bulk of
orange output goes to processing, and good fruit quality that will translate
into a higher juice yield (projected at 1.55 gallon per box at 42 degree Brix).
A similar trend is expected in Brazil. Although drought has delayed the 2004
orange harvest by two months, Brazilian output is expected to be high. Forecasts
for the São Paulo state range between 346 and 360 million 40.8 kg-boxes
depending on the source. As a result, production of FCOJ should rise markedly
from the relatively low level of the previous year. Similarly, Spain, the
world's third largest producer of FCOJ, is expected to raise its juice output by
14 percent from the previous year, reaching almost 57 000 tonnes, its highest
level over the past ten years. The increase reflects higher production of
oranges.
Consumption of orange juice increased in Europe and Asia but fell in the United
States in 2003-04. Industry sources claim that this fall is the consequence of
the adoption of low-carbohydrate diets such as the Atkins or South Beach diets.
According to an industry source, national consumption of orange juice has
dropped to an estimated 5.3 billion litres, which is 13 percent below the level
of the 1999-2000 season. However, world exports of orange juice were up in the
2003-04 season from the previous season. Brazil, by far the world's leading
supplier, raised its exports to over 1.13 million tonnes, a 19 percent increase
on the previous season.
Prices for FCOJ decreased markedly in the last quarter of 2003 and early 2004.
Futures prices reached a record low in April 2004, with the spot price falling
below US$0.60 per pound solid, compared with US$0.80 one year earlier. In May
2004, prices fluctuated between US$0.5 and 0.6. Similarly, prices on the
physical market fell to low levels. Brazilian FCOJ traded between US$900 and
950/tonne (bulk, FCA Europe) in April 2004. No major improvement is forecast for
the remainder of 2004. The expected increase in FCOJ production in the world's
largest producing countries as described above will keep downward pressure on
prices. In addition, FCOJ inventories are large in both Brazil and the United
States. Consequently, prices should remain low until the end of the year unless
demand recovers in the United States.
Production (000 MT)
Production
Citrus utilization for processing (000 MT)
Citrus utilization for processing
Prices (wholesale)
Prices (wholesale)
Exports of fresh citrus (000 MT)
Exports
Imports of fresh citrus (000 MT)
Imports
Last Update: June 2004
