In W42 in the orange landscape, the global orange market faces high orange prices due to shifting production from the Southern Hemisphere to the Northern Hemisphere.
In Germany, South African orange varieties continue to dominate the market. However, the imported South African and Australian orange prices remained high. Spanish and Italian oranges have also entered the German market, with even the typically less expensive Italian oranges currently commanding high prices. Meanwhile, there was a shortage of small South African oranges used for juice production in Italy. This scarcity, combined with the Citrus Black Spot (CBS) issue, resulted in much higher prices per kilogram (kg). The orange shortages can primarily be due to this problem, leading many importers to cancel numerous orders throughout the year. The forecasts for the Northern Hemisphere citrus season predict a significant shortage of navel varieties in Spain, affecting prices in Oct-23 and Nov-23. However, Italian production estimates indicate a stable situation despite a global decline of approximately 40% year-on-year (YoY) in orange production.
There are positive expectations for the orange season as Egypt experiences increased demand for its oranges. The dry weather in Europe has increased the demand, filling the gap left by reduced domestic supply in Spain and Italy, where orange production has decreased by approximately 30% YoY. Egyptian exporters are actively expanding into North America, Asia, and the Middle East to enhance their presence. The citrus industry is also shifting towards organic oranges due to the growing demand for these products.
South African orange exports for the 2023 season are estimated at 164.4 million 15-kg cartons, slightly lower than the previous year. With 25.5 million cartons, Europe remains the largest recipient of South African oranges, while the Middle East and Asia have also seen significant shipments. Locally, orange prices stood at USD 0.38/kg (ZAR 7.23/kg), a 50% increase YoY.
Orange production in Spain for the 2023/24 season is expected to decrease by 8.2% YoY, amounting to a 24% reduction or 832 thousand tons less due to drought, extreme temperatures during the flowering and fruiting stages, and irrigation restrictions in some areas. Despite concerns about non-standardized products, including unripe and unstandardized oranges, entering the market, there is a growing demand for stricter adherence to regulations and quality standards to ensure healthy export trade.
The United States (US) is experiencing a significant decline in orange production this 2022/23 season, dropping over 25% YoY to 2.3 million tons, the lowest in over 50 years according to the United States Department of Agriculture (USDA). Also, orange juice production will decrease by nearly 50% YoY to 85 thousand tons. It is due to a series of disasters, including hurricanes, cold waves, hail, and the impact of Huanglongbing, also known as "citrus cancer."
As a result, the price of frozen concentrated orange juice (FCOJ) futures has risen significantly, currently at USD 3.56/pound (lb), compared to USD 1.7/lb in 2022. This increase in orange futures prices will lead to higher prices for orange juice in supermarkets. These challenges have affected Florida, which supplies over 90% of US orange juice.
The orange season in Florida has commenced, and although the fruit size is slightly smaller in 2023 due to dry conditions, it maintains high quality. Demand remains steady, and orange prices are slightly higher than in 2022. Meanwhile, California anticipates a navel orange harvest of approximately 74 million cartons for the upcoming season, an increase of 1% YoY.
Lastly, Texas consumers can expect continued increases in orange and orange juice prices due to reduced supply caused by unfavorable weather conditions. Meanwhile, Brazil's orange production also declined due to drought. This comes from a decade-long trend of declining orange production and consumption. These factors have led to tighter orange supplies and price hikes, with a 3-lb bag of navel oranges costing USD 4.46 to 4.05 and single oranges priced at USD 1.11 to 0.89 in 2022. The situation is compounded by low water reservoir levels, affecting irrigation for Texas orange growers.
