17th November 2019

Brazil – Challenges ahead but prices could strengthen in the near future

The orange juice processing plants in Brazil are now in full swing, indicating an increased juice output for 2019/20. As a result, Brazilian processors have been pushing high supplies of orange juice in the European market, one of the largest export destinations for Brazilian orange juice.

However, EU imports have been slowing down as EU processors are hoping for orange juice prices to go down with excessive supplies in the market. Also, some of the large retailers in the EU have already fixed their long-term contracts earlier this year. Thus, lower demand from both processors and retailers have resulted in weak imports of Brazilian orange juice. As a result, Mintec Brazilian orange juice concentrate prices in the EU are down 10% year on year and by month.

Furthermore, the Brazilian orange crop is estimated to be cut as a result of droughts in the country. Temperatures are currently above the average and if the drought continues, the upcoming crop’s (2020/21) output is likely to drop by 10% year on year. Therefore, above adverse weather conditions are expected to release downward pressure from the prices. Also, anticipations of smaller orange crop volumes in Spain and Egypt are likely to strengthen the Brazilian orange juice prices in the near future. Mintec

By Caroline Calder News Share: