The Wholesale Price of Orange Juice Soars to Record High Amidst Disastrous Harvest

By Le Figaro with AFP

Published 2 hours ago, Updated 2 hours ago

Its closing price on Tuesday, $417.70, is more than double (+102%) what it was a year ago. Marcos – stock.adobe.com

Due to a disastrous harvest, wholesale prices have more than doubled in one year.

The wholesale price of orange juice has soared, Tuesday, at the highest level in its history, propelled by very low stocks, awaiting a harvest which promises to be increasing. The futures contract for frozen and concentrated orange juice for delivery in November, listed on the Chicago Stock Exchange, rose to $4.3195 per pound (approximately 450 grams). Its closing price on Tuesday, $417.70, is more than double (+102%) what it was a year ago.

The main cause of this outbreak is the level of stocks, almost halved (-46%) compared to last year at the same time, and divided by four compared to 2019 (-77%). This is the result of a disastrous 2022/23 harvest, estimated at 2.3 million tonnes, the lowest in 56 years, according to the US Department of Agriculture (USDA). A contraction which is primarily due to the spread of the so-called yellow dragon disease. Also called Huanglongbing disease (HLB), it can disrupt the ripening of citrus fruits and cause premature fruit drop.

It is carried by the psylla, a tiny insect, vector of a bacteria which feeds on the sap, hinders the growth of the fruits and goes so far as to cause the death of the tree. Furthermore, Florida, the main region for orange juice production, was the victim of Hurricane Ian at the end of September 2022, then of Nicole, in November 2022. The two weather phenomena crossed the center of the ‘State, causing the premature fall of thousands of fruits.

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Prices which “will fall in the next twelve months”

But for Shawn Hackett of Hackett Financial Advisors, Tuesday’s high could mark the start of a market turnaround. He thus underlined that after having established a new record since the launch of orange juice futures in 1966, prices had dropped almost 5% in the second part of the session (-4.63%). “I think prices will fall again in the next twelve months, probably half of today’s level, if not more.», Warns the analyst.

First factor, the production of Valencia variety oranges, the most used for juice, is expected to increase by 23% for the 2023/24 season, according to the USDA. Another element, “we haven’t had a hurricane this year» which hit the crops, recalls Shawn Hackett. The last element likely to favor a change in prices is the slowdown in demand, which “has seen a steady decline for two decades”, according to the USDA. In twenty years, the consumption of orange juice has been divided by more than two in the United States. She is not encouraged by prices, which have increased 21% in one year for juices and non-carbonated cold drinks, according to the US Department of Labor.

2023-11-01 08:41:00


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