W3 Orange Update: Brazil's Table Pear Orange Prices Surge, Spanish Orange Production Declines, and China and Florida's Orange Production Outlook 2023/24

Egypt's Orange Export Crisis Sparks Shortage in Asian Markets Amid Yemeni Houthi Attacks

Due to Yemeni Houthi rebel group attacks on civilian ships in the Red Sea and Suez Canal, Egypt, the world's third-largest exporter of fresh oranges, is currently facing a crisis. This has led to a shortage of Egyptian oranges in Asian markets. In response, Egyptian citrus producers and exporters are exploring alternative shipping routes, while producers have been forced to suspend the orange harvest due to concerns about price collapse.

Egypt is the second-largest supplier of oranges to China and is expected to increase its fresh orange production by 2.7% to 3.7 million metric tons (mmt) due to favorable climatic conditions. The main varieties of oranges are Baladi, Valencia, Navel, and Sukkari. The export season usually begins in mid-November and extends until the end of July. Egypt exports oranges to 126 countries, with the Netherlands, Russia, Saudi Arabia, India, the United Arab Emirates (UAE), Spain, Bangladesh, Syria, China, and the United Kingdom (UK) being the top 10 destinations.

Pear Orange Prices Surged in Brazil During W3 Amidst Limited Supply and Projected Harvest Challenges

In Brazil, table pear oranges are experiencing a significant increase in value, reaching USD 16.03/40.8 kilograms (BRL 80/40.8 kg) at the point of origin. This is due to a limited supply of fruit on the market. The average price stood at USD 16.45 per 40.8 kg (BRL 82.08/40.8kg), a 5.98% year-over-year (YoY) increase. However, Brazil's 2024/25 harvest is forecasted to be 1% YoY lower due to the high incidence of greening and adverse climatic conditions. This could lead to a supply below demand from juice factories, posing significant implications for the juice industry in Brazil.

China's Local Orange Production Forecasts for the 2023/24 Season

According to the United States Department of Agriculture (USDA), China's domestic orange production is expected to rise to 7.63 million tons in the 2023/24 season, driven by growth in primary production regions. The largest producer of Navel oranges, Jiangxi province is expected to see a 15% YoY increase in production due to heavy rains and tree replanting. However, this rain may reduce the Brix level of the fruit, impacting overall quality. The Hunan and Hubei regions are forecasted to improve fruit quality, but production levels remain constant. Lower Brix levels are expected to impact navel orange prices, with packers and distributors predicting a 12% to 30% YoY drop. The report also forecasts a slight decline in orange imports to 210 thousand metric tons (mt), following a 4.6% decline in 2022/23. Meanwhile, orange exports are expected to remain stable at 50 thousand mt due to increased output and a rebound in demand from Russia.

USDA Forecasts 30% YoY Surge in Florida's 2023/24 All-Orange Production

The USDA Agricultural Statistics Board has released the 2023/24 Florida all-orange forecast, which predicts a 30% YoY increase in production. The forecast includes 7.5 million boxes of non-Valencia oranges, which provides for early, mid-season, and Navel varieties, and an additional 13 million boxes of Valencia oranges. Notably, the final fruit size for non-Valencia oranges falls below the established minimum requirement, necessitating 336 pieces to fill a 90-pound box adequately. Furthermore, the final dropping rate for non-Valencia oranges is fixed at 43%, aligning precisely with the maximum allowable threshold. The Navel forecast is specified at 300 thousand boxes, representing 4% of the total non-Valencia estimate.

Cyprus Faces 20% Orange Price Hike Amid Climate-Induced Juice Cost Surge

In Cyprus, a 20% price hike for oranges is expected due to a threefold increase in the cost of orange juice, attributed to the impact of climate change on global crop yields. The increase is mainly due to the decrease in orange production in Cyprus due to extensive land development. The increased costs of importing orange juice from major markets like Brazil, America, Spain, and Egypt, along with the immediate impact on consumer pockets, are contributing to the challenges faced by the local orange industry. The anticipated price hike also highlights the broader implications of environmental shifts on the global supply chain and local economies.

Spain's 20.9% YoY Drop in Orange Production Amidst Global Supply Chain Strain

Spain's orange production decreased by 20.9% YoY in the 2022/23 season, with imports exceeding 228 thousand tons. The Red Sea crisis pressures international maritime logistics, potentially redirecting fruit from Egypt to other continents. Around 20% of Egypt's production goes to Asia, but if maritime traffic is not restored, there may be extra pressure on the market. The European primary sector must be protected to avoid dependence on third countries and ensure the livelihood of thousands of producers.