W2 Orange Update: Houthi Attacks Disrupt Egyptian Citrus Exports, Red Sea Tensions Affect Transportation Costs, Anticipated Growth in South Africa's Orange Production and Brazil's Orange Prices Surged

Yemeni Houthi Attacks Disrupt Egyptian Citrus Exports via Red Sea and Suez Canal, Causing Shortages in Asian Markets and Posing Significant Challenges for Growers

The Yemeni Houthi rebel group's frequent attacks on civilian vessels have disrupted container shipping along the Red Sea and Suez Canal, causing a crisis for Egyptian citrus producers and exporters. The suspension has led to a shortage of Egyptian oranges in Asian markets. Egyptian exporters are exploring alternative routes, but identifying viable alternatives is challenging due to distance and costs. The crisis could lead to substantial losses for Egyptian growers.

Red Sea Tensions Impact Transportation Costs from Egypt to Saudi Arabia and UAE During W2

During W2, tensions in the Red Sea led to a 13% increase in transportation costs for reefer trucking from Egypt to Saudi Arabia. Prices rose from USD 4,840 to USD 5,469 per 53-foot truck. However, costs for reefer trucking from Egypt to the United Arab Emirates (UAE) have stabilized at USD 8,318 per 53-foot truck, indicating a pause from the previous week's 10% WoW increase.

South Africa's Orange Production Set to Increase Amidst Challenges in the 2023/24 Season

Orange production in South Africa is expected to increase by 3% in 2022/23 and 2% in 2023/24 due to a weakening rand and increased exportable oranges. However, port conditions in Durban and Cape Town pose a threat, and the northeastern port of Maputo is forecasted to export more oranges. The main reasons are reduced planting areas and less optimism for the producers.

China Anticipates Growth in Orange Production with a Slight Dip Projected in Imports for 2023/24 Season

China's orange production is expected to rise in 2023/24, reaching 7.63 million metric tons (mmt). The heavy rainfall in Jiangxi Province, China's largest producer, is expected to contribute to this increase but may lower the overall quality of navel oranges. Hunan and Hubei regions are expected to improve fruit quality, but production levels remain unchanged. The report predicts a 12 to 30% slump in navel orange prices. This strong domestic production is decreasing the need for imported oranges, but exports are forecasted to remain stable due to increased product and a rebound in demand from Russia.

Scarcity and High Temperatures Drive Up Orange Prices in Brazil During W2

Orange prices in Brazil are rising due to scarcity and increased demand driven by high temperatures. Pear oranges stood at USD 15.83/40.8-kilogram box (BRL 77.10/40.8kg box), an increase of 5.21% WoW. Leaf wither variety saw an 8.46% WoW increase, reaching an average of USD 13.15/box (BRL 64.06/box).

Valencian Farmers Association Assures Stability in Citrus Sector Amidst Egyptian Orange Imports to European Market in the 2023/24 Season

The Valencian Farmers Association (AVA-ASAJA) conveyed a sense of reassurance within the citrus sector despite the entry of Egyptian oranges into the European market. The association acknowledges the media's concern and the lower number of purchase and sale operations but remains calm based on objective arguments. Top-level merchants avoid market oranges from Egypt due to their lower organoleptic and gustatory qualities. AVA-ASAJA assures citrus growers that prices at origin will not decrease due to the shortage of oranges in Brazil and the United States (US) due to Huanglongbing disease. The association highlights the favorable scenario for producers due to the shortage of production in Spain and the lower taste quality of Egyptian oranges.