Brazil's Orange Juice Has Rebounded in MY 2022/23

Published 2023년 8월 16일

After two years of decline, Brazilian orange juice exports increased in MY 2022/23 (Jul-22 to Jun-23). Brazil exported 1.09 million metric tons (mmt) of frozen concentrate orange juice (FCOJ), up 9% year-on-year (YoY) in MY 2022/23. The increase in Brazilian orange juice in the United States (US) was attributed to the export surge. However, Brazil's initial orange projection for MY 2023/24 is predicted to be 309.34 million boxes, a 1.55% YoY decline. Even with this slight decline, it is anticipated to impact Brazil's supply of oranges delivered for processed orange juice. Given the continued scarcity of supplies, the global price of orange juice is expected to remain high. The high prices may persist for another season unless there is an unexpected rise in orange supplies from Brazil's crop in MY 2023/24.

Brazil is the world's largest producer of fresh oranges and has emerged as a significant player in the processed orange export market. Brazilian orange juice exports rebounded in MY 2022/23 (Jul-22 to Jun-23) after two consecutive years of decline. According to data from Secex, Brazil exported 1.09 million metric tons (mmt) of Frozen Concentrate Orange Juice (FCOJ) in MY 2022/23, an increase of 9% year-on-year (YoY) in volume shipped in the previous season. The revenue generated from these shipments totaled USD 2.1 billion, an increase of 28% YoY.

Source: Secex

The United States (US) has become a key destination for Brazil's orange juice exports in MY 2022/23. The surge in demand from the US is due to the challenges faced by Florida's orange production industry. Devastating hurricanes and the pervasive citrus greening disease have hampered US domestic production, creating a supply shortfall. Quality issues, coupled with challenges in Mexico's productivity and limited alternative suppliers, have positioned Brazil as a key player in the US orange juice market. As a result, Brazilian orange juice exports to the US have increased substantially. According to Secex, the Brazilian exports of orange juice to the US have risen in MY 2022/23, totaling 340.9 thousand metric tons, 69% YoY higher than the volume shipped in MY 2021/22. Revenue totaled USD 701.9 million, an increase of 93% YoY. With Florida's short-term production prospects remaining bleak, the US will likely continue relying heavily on Brazilian orange juice imports.

The European Union (EU) is another destination for Brazilian orange juice but it has decreased its consumption. Brazilian orange juice exports to the EU totaled 569.6 thousand metric tons in MY 2022/23, 8% YoY less than that shipped in the previous season. Revenue totaled USD 1.13 billion, an increase of 9% YoY. The high price of global orange juice contributed to a decrease in EU imports, which was influenced by high food price inflation and competition from alternative beverages and fruit juices.

Forecasts for Brazil's MY 2023/24 orange harvest will be important in determining supply dynamics. According to Fundecitrus, the initial orange forecast for Brazil’s citrus belt in MY 2023/24 is 309.34 million boxes, down by 1.55% YoY. Despite a slight decrease, it is expected to affect the supply of oranges delivered for processed orange juice in Brazil. The US’ growing reliance on Brazilian imports and ongoing challenges in Mexico indicate that supply may remain constrained. As of August 15, ICE futures prices for September FCOJ contracts surged to USD 3.11/lb, an increase of 14% month-on-month (MoM) compared to July 14, which was USD 2.72/lb — evidence of the market's response to supply challenges.

Currently, the orange juice market has remained tight. The situation might continue for another season unless there's an unexpected increase in orange supplies from Brazil's harvest in MY 2023/24. Furthermore, if the global demand for orange juice drops due to the ongoing high prices, it could also play a role in the orange juice market’s trajectory.