Front-month orange juice prices on the Intercontinental Exchange (ICE) rose by 5% month-on-month to USD 1.15/lbs on the 13th May 2021. The price increase can be attributed to tighter orange supplies in recent weeks in the US and Mexico.
The USDA expects Florida’s 2020/21 orange crop to be 3.8 million boxes lower than the previously estimate (51.7 million boxes). This would be 23% lower than last season’s final production. Market participants say the high drop rate for the Valencia variety may be the main reason for the reduction in the USDA`s orange forecast.
The USDA estimates the fruit drop for the Valencia variety to be 41%, with industry sources agreeing with the fruit drop rate figure, as there is significant volume on the ground at the moment. In terms of processing, juice yields are reported to be at 6.02 gallons/box compared with 6.07 gallons/box at the same time last year.
In the meantime, orange fruit availability in Mexico declined since the end of March. Local sources report that the 2020/21 orange crop is close to finishing now. The crop in the northern states of Mexico was damaged by freeze events over the last few months, but current projections on final production for 2020/21 remain optimistic, at 59-60 million boxes compared to last month. Furthermore, there is no evidence of tree damage for the next crop because of the freeze event, however, the bloom could be delayed.
According to information¸ considering the above supply fundamentals, the global orange juice market is expected to remain tight for the remainder of Q2 2021.
