Brazilian Fruit Juice Shipments to the UK Set to Rise, Following Suspension of Tariffs

Orange Juice

United Kingdom

Brazil

Published Dec 15, 2022

The UK has suspended import tariffs on ready-to-drink and concentrated juice products coming from Brazil for two years, from Jan-2023 to Dec-2024. Orange shipments from Brazil to the UK are expected to benefit significantly from the suspension of tariffs. Over the two years the 12.2% import will be removed, the South American country is expected to save approximately USD 5 million. The UK also possesses significant potential as an orange juice market, currently estimated at USD 1.2 million by the International Trade Center (ITC), since the British have no local juice production and are reliant on imports.

The UK has suspended import tariffs on ready-to-drink and concentrated juice products coming from Brazil for two years, from Jan-2023 to Dec-2024. This policy follows an application made by the British Fruit Juice Association, the British Soft Drinks Association (BDSA), and the Brazilian Association of Citrus Juice Exporters (CitrusBR) to the British government in July 2021. The petition aimed to facilitate the orange juice trade between Brazil and the UK as the British government continues to revise import tariffs following Brexit.

According to CitrusBR, orange juice shipments from Brazil to the UK are expected to benefit significantly from the suspension of import tariffs. Over the two years that the 12.2% import levy will be removed, the South American country is expected to save approximately USD 5 million. Brazilian orange juice shipments to the UK could also gain considerably during this period, as Britain is currently Brazil's third largest orange juice market in Europe on the coattails of Germany and France. The UK also possesses significant potential as an orange juice market, currently estimated at USD 1.2 million by the International Trade Center (ITC), since the British have no local juice production and are reliant on imports.

Another reason for the current import tariff review is elevated prices for fruit juices in the country. UK orange juice prices rose as high as GBP 2.00 per kg in 2022, an increase of over 124% over the past two years. Along with the impact of the import levy, prices remained bullish owing to British importers transferring the rising cost of fuel and transport down to the consumer. However, according to Tridge's price analysis, it is expected that following the removal of the current import taxes, orange juice prices in the UK could fall below GBP 1.65 per kg in the coming year.

Another factor that may hep subdue prices in the UK is incresed production in Brazil. Brazilian frozen concentrate orange juice (FCOJ) production is projected at 1.138 million mt this season, an increase of 12% over the previous season. As a result, the country's FCOJ exports are forecast to reach 1.04 million mt, a slight rise of 30K mt compared to the previous year. Europe is expected to remain the key destination for Brazilian FCOJ, accounting for 64% of the total shipments, with a significant portion destined for the UK.

Following the initial tariff suspension period of two years, the British government is expected to consider an extension as the scenario is preferable to British fruit juice importers and consumers.