Orange juice prices jumped Friday after Florida issued a state of emergency as tropical storm Erika barreled toward the state, posing risks to citrus crops.
Futures for frozen, concentrated orange juice are one of the smallest commodity markets, with a market capitalization of less than $200 million, and as such prices are vulnerable to volatile swings. But the trading Friday was outsized by even those standards, with prices surging 6.3% at one point before settling back.
Orange juice futures for November delivery, the most actively-traded contract, ended the day up 2.8% at $1.2995 a pound on the ICE Futures U.S. exchange.
The storm was headed toward Florida after reportedly killing at least four and causing massive flooding on the Caribbean island of Dominica. Florida's crop, the source for most of the oranges used in juice production for the U.S., is currently in the midst of its growing season, with the fruit currently reaching baseball-sized proportions.
Orange juice has been in a funk over the last year as rising retail prices, more competition on the juice aisle and dietary wariness of its high sugar levels have prompted consumers to pull back. Meanwhile, a greening disease has ravaged crops.
But the market has begun to recoup some of its earlier losses in recent weeks amid the approach of hurricane season, and prices so low that the contract has begun to look like a bargain to some investors.
