Frozen orange juice concentrate futures hit an all-time high this month, reaching 514.65 cents a pound, setting the stage for a surge in retail prices. The commodity, made famous by its role in the movie “Trading Places,” is expected to continue rising due to climate factors and Brazil’s worst orange harvest in 36 years.
Orange juice follows coffee in agricultural commodity rally, hitting record prices
The price of orange juice concentrate, a commodity made famous by the movie “Trading Places,” is continuing to rise due to a series of situations affecting citrus production. According to Brazilian media, the orange price problem will not have a quick solution, as the country is experiencing its worst orange harvest in 36 years.
This has affected prices worldwide, as Brazil is the largest producer of oranges. The benchmark frozen orange juice continuous contract has hit a record high of 514.65 cents/lb. Retail products have. However, prices could rise even higher, as stocks are technically depleted in Brazil, according to the National Association of Orange Juice Exporters (CitrusBR).
A disease called citrus greening is affecting the crops of Brazil and Florida, reducing their yields. In Brazil, an estimated 38.06% of the orange crop, or about 77 million orange trees, have been infected, with laws requiring the trees to be cut down and removed.
This situation has forced juice bottlers to come up with new blends to try to keep prices low, making juices with lower orange content or even mixing apple juice with orange juice to get a similar taste.
Orange juice is part of a coffee-led rally in agricultural commodities that is also near record highs. Arabica coffee futures hit $2.49 a pound, near a multi-decade high. The rally is also linked to adverse weather in Brazil, which produces a third of the beans.
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