Mexico has once again surpassed Brazil as the major supplier of orange juice to the United States.
Although the dollar amount of orange juice shipped to the US between January and June is half as much as it was last year, Mexico exported USD142 million of juice in the first six months of 2020, considerably more than Brazil’s USD91 million. Mexico exported USD333 million worth of juice last year, beating Brazil by USD3 million. A recent study by CitrusBR, an organization representing the three largest Brazilian exporters of orange juice, showed that sales from Mexico to the United States have skyrocketed since 2008, when US customs eliminated tariffs on imports of concentrated and frozen orange juice from Mexico as part of the North American Free Trade Agreement (NAFTA).
In contrast, US imports of orange juice from Brazil pay a tariff of USD 415.86 per tonne.
In 1993, when the US tax on juice from all sources was still USD490.02, Brazil exported 144,500 tonnes of concentrated and frozen orange juice to the United States. That volume has dropped to just 71,100 tonnes in 2019. According to CitrusBR, Mexico’s exports of concentrated and frozen orange juice went from 9,800 to 74,700 tonnes in the same period.
“With a good quality product, similar to that produced in Florida, and land freight around 50% cheaper than Brazilian maritime logistics, the Mexican product continues to gain [ground],” Brazilian newspaper Valor Economico reported in reference to the CitrusBR study.
The United States Department of Agriculture forecasts that Mexico’s exports for the 2019-2020 season will total 104,850 tonnes, as drought has decimated the orange production affecting the supplies available for processing. The vast majority of concentrated and frozen orange juice production in Mexico is destined for export to the United States. There is some small trade with Europe, depending on prices. Likewise, Mexico imports a small amount of orange juice for supermarkets or small processors that have their own juice brands. Mexico has 342,885 hectares of orange orchards, 55% of which are located in Veracruz. Tamaulipas, Nuevo León, Puebla, San Luis Potosí, Hidalgo and Sonora also produce oranges. This year the heat and drought are expected to drop Mexico’s orange production per hectare by 34%. Most of Mexico’s orange trees are older, and therefore harder hit by the drought than other fruits. El Economista