Hurricane Ian to worsen bleak outlook for U.S. orange juice industry; Brazil exports soar in response

The Brazilian orange juice industry, the world’s largest producer and exporter, is closely monitoring the impact of Hurricane Ian in Florida, an essential citrus-growing area in the United States, and assesses that it is not yet possible to estimate the effects of the natural disaster on Brazilian exports.

“We cannot yet know the impact of the hurricane. We will glimpse it once the bulk of the phenomena passes. I’ve been talking to people in Florida; everyone is sheltered there. I’m not sure if anyone already knows the extent of the damage [to the orchards),” said the executive director of the Brazilian exporters association CitrusBR, Ibiapaba Netto.

Cautious, he saw the speculation about the impact on the U.S. crop as natural, which pushed up the prices of frozen orange juice and concentrate on the ICE exchange by over 7% since Monday.

He argued that it would only be possible to assess Ian’s impact on the Florida crop and its consequence on Brazilian exports later on.

Hurricane Ian is likely to have worsened what was already expected to be the smallest US orange crop in 55 years after it blasted through a large fruit-producing area when it passed through Florida this week, flooding farms and causing oranges to drop from trees.

To avoid making biased predictions, Netto recalled that when hurricane Irma hit Florida in 2017, there was a surge in demand for Brazilian orange juice.

In 2017/18, orange juice exports from Brazil grew by 28.6% to 1.15 million tonnes compared to the previous season, the highest mark since 2009/10.

“When Irma hit, it damaged 50% of Florida’s crop, which was already small. However, Irma was much bigger than the current one… What happened was: people assumed that it would take four to five years for the orchards to recover, and by the following harvest, they had already returned to normal levels,” he commented.

Please find below the track record of orange juice exports (HS 200911; HS 200912; HS 200919) from Brazil between January 2021 and Aug 2022. The data is from DataLiner.

Orange Juice Exports | jan 2021 – aug 2022 | TEUs

Source: DataLiner (click here to request a demo)

According to CitrusBR data, the following year’s Brazilian exports plummeted to 925,800 tonnes to all destinations – generally, the European Union is Brazil’s largest customer, followed by the U.S. – due to an increase in stockpiles in the U.S. from the commodity imported from Brazil.

The U.S. accounted for around 20% of Brazilian juice exports in the last harvest.

At the moment, Netto added, Florida’s production is in a worse situation than at the time of Irma, which could worsen the supply condition.

If the orchards are damaged, the chance of recovery is lower than in 2017, recognized the director of CitrusBR.

Florida orange production was already expected to be poor, as planted areas have been falling yearly due to real estate expansion and the spread of the greening fungus disease.

Source: Investing

To read the full original article, please go to: https://br.investing.com/news/commodities-news/industria-de-suco-de-laranja-do-brasil-monitora-ian-apos-irma-exportacao-saltou-1041145

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