1. Weekly News

Egypt

Egyptian Oranges Set to Enter Asian Markets Despite Ongoing Red Sea Crisis

Egyptian oranges are expected to enter the Asian markets on Dec-24, signaling the start of the citrus campaign despite a significant Red Sea crisis that disrupted the previous season. The ongoing crisis has escalated due to heightened conflict in the Middle East, but the Egyptian citrus industry is adapting by diversifying logistics solutions to mitigate risks associated with piracy and logistical issues. Exporters are prioritizing secure shipping routes to destinations in Asia, which account for over 30% of Egyptian orange exports. They are also implementing enhanced packaging and cold chain management to maintain quality during extended transit times.

Despite these challenges, the outlook for the upcoming season appears optimistic. Expectations for increased demand in Asian markets arise due to global supply shortages. Furthermore, volume control is considered necessary to avoid oversupply, which affected exporters last season, especially in Europe. In response to these market dynamics, Sahara for Fruit Processing will launch a new orange concentrate this winter, reinforcing the sector's resilience amid ongoing uncertainties.

Mexico

Veracruz Surpasses Martínez de la Torre as Mexico's Leading Orange Producer

In Mexico, Martínez de la Torre, a municipality in Veracruz, is renowned for its high-quality oranges, making its name synonymous with premium citrus in markets across the region. Despite its reputation, Martínez de la Torre ranks ninth in the state for orange cultivation, with 7.7 thousand hectares (ha) dedicated to this crop, trailing behind municipalities like Tecolutla and Álamo Temapache, the latter boasting an impressive 60,039.27 ha. Veracruz is the leading orange-producing state in Mexico, with a total of 249.7 thousand ha, far surpassing Tamaulipas and other competitors. This distinction highlights Veracruz's diverse and significant agricultural landscape, where orange production is essential to the economy and local identity.

United States

Supply Challenges and Opportunities for Imported Oranges from Chile and South Africa in the US

In the United States (US), the current season for imported oranges from Chile and South Africa has faced challenges due to a significant reduction in supply, which has decreased by 20 to 30% compared to initial forecasts. Cold weather in Chile and heavy rains in South Africa at the start of the harvest have contributed to this tight supply, particularly affecting larger sizes. As the season progressed, the situation improved, increasing the availability of larger sizes (48 and 56), while smaller sizes (88 and 105) remained scarce. The transition to Valencia oranges is in progress, with navel oranges still arriving and Midknight Valencias providing medium-sized fruit. Despite the limited availability, demand for Navel oranges remains strong, ensuring favorable prices for the available stock. The supply is expected to last another three weeks before national retail programs commence, likely resulting in a market shift by the end of Oct-24.

Minimal Crop Damage in Florida Following Sub-Freezing Temperatures

Florida's citrus growers are relieved after a recent night of sub-freezing temperatures that resulted in minimal crop damage despite temperatures dropping well below freezing for several hours. The extreme cold affected Central and North Florida, particularly low-lying areas where young trees may have suffered. However, reports indicate widespread damage was avoided, allowing the state to maintain its position as the world's second-largest orange producer, following Brazil. The United States Department of Agriculture (USDA) estimates that Florida will produce 147 million boxes of oranges this season, reflecting a 5% year-on-year (YoY) increase. Following the freeze, orange juice futures surged to a five-month high, indicating strong market

2. Weekly Pricing

Weekly Orange Pricing Important Exporters (USD/kg)

Yearly Change in Orange Pricing Important Exporters (W40 2023 to W40 2024)

Spain

In W40, orange prices in Spain increased by 7.14% week-on-week (WoW) to USD 0.30per kilogram (kg) due to adverse weather conditions, including intermittent rain and sunny spells, which disrupted harvesting schedules and limited supply. However, YoY prices dropped by 6.25% due to improved supply conditions earlier in the year, which led to a surplus and tempered the overall price increase despite current weather challenges.

South Africa

South Africa's orange prices increased significantly by 41.11% WoW to USD 1.27/kg in W40. This increase is due to a temporary reduction in local supply as producers respond to the previous oversupply, leading to a more favorable market balance. Additionally, sunny weather conditions have positively influenced fruit quality and consumer demand, contributing to the upward price momentum. However, month-on-month (MoM) prices dropped slightly by 7.97% due to the lingering effects of the earlier oversupply and continued limitations in export opportunities stemming from strict pest control regulations and logistical challenges associated with cooling treatments. This combination of factors has created a complex pricing environment, with ongoing market conditions tempering recent price spikes.

Egypt

In Egypt, orange prices rose by 15.15% WoW to USD 0.38/kg in W40, marking an 11.76% MoM increase and a 31.03% YoY increase. This rise is due to a rebound in consumer demand as the market prepares for the upcoming citrus campaign on Dec-24. Exporters also adapt to logistical challenges, prioritizing secure shipping routes and enhancing packaging to maintain quality. Additionally, expectations of increased demand in Asian markets due to global supply shortages further support price growth. However, the industry remains cautious about avoiding oversupply, particularly in Europe.

United States

Orange prices in the US rose to USD 1.95/kg in W40, marking a 0.52% WoW increase, a 4.28% MoM rise, and a substantial 42.34% YoY increase. This growth is due to sustained strong demand for navel oranges and ongoing supply constraints from reduced imports due to unfavorable weather conditions in Chile and South Africa. The availability of larger orange sizes is increasing, but tighter supplies of smaller sizes continue to exert upward pressure on prices. Additionally, the recent cold snap in Florida resulted in minimal crop damage, helping to stabilize production expectations and boost market confidence, reflected in the surge of orange juice futures to a five-month high.

3. Actionable Recommendations

Implement Frost Mitigation Strategies for Citrus Growers

Citrus growers in Florida should invest in frost mitigation strategies, such as using wind machines and protective covers for vulnerable young trees. These measures can help safeguard crops from potential freeze damage in the future. Additionally, growers should monitor weather forecasts closely and develop contingency plans for extreme cold events. By proactively managing frost risks, they can ensure the resilience of their orchards and maintain their production levels in a competitive market.

Focus on Quality and Branding for Veracruz Oranges

Orange growers in Veracruz should prioritize enhancing the quality and branding of their oranges to differentiate their products in the market. By promoting Veracruz oranges' unique characteristics and superior quality, growers can create a distinct identity that attracts consumers. Collaborating with local cooperatives and marketing agencies will help establish strong branding campaigns. This approach can enhance market visibility and increase sales, solidifying Veracruz's position as a primary player in the national orange production landscape.

Optimize Supply Chain Management for Orange Producers

Orange producers in South Africa should enhance their supply chain management to adapt to fluctuating market conditions. Producers can better align their harvesting and marketing strategies by closely monitoring local supply levels and consumer demand. Investing in efficient storage and logistics solutions will mitigate the impact of strict pest control regulations and improve the ability to respond to market changes promptly. This proactive approach can help stabilize prices and ensure consistent product availability, positioning producers favorably in a competitive market.

Sources: Tridge, Comitedecitricos, Freshplaza, Lasillarota, Msnbc, Naranjasyfrutas