Brazil’s orange juice rebound sends prices tumbling 50% in 2025

As the world’s largest exporter of orange juice, Brazil has driven a steep drop in the commodity’s prices—cutting futures by 50% so far this year alone. In early January, frozen concentrated orange juice (FCOJ) contracts hit a record high of $5.1465 per pound on the New York exchange. On Wednesday, they traded at $2.6210 after bottoming out at $2.4290 on March 18. Over the past 12 months, prices are down 28.7%, according to Valor Data.

The sharp decline stems from expectations of a recovery in Brazil’s orange crop for the 2025/26 harvest, which begins in May. The previous season yielded 228.52 million boxes, significantly affected by drought.

“Much of the market is working with an estimate of between 260 million and 300 million boxes. In the best-case scenario, that would be a 30% increase—bringing us close to 2023 levels, when Brazil harvested 307 million boxes,” said Andrés Padilha, senior analyst at Rabobank Brazil.

In February, the U.S. Department of Agriculture (USDA) office in Brasília projected an even higher number: 320 million boxes for the new cycle.

While Mr. Padilha said the USDA forecast is the most optimistic, he acknowledged it is still plausible. However, other variables may weigh on the outcome.

“With recent high prices, growers are investing more in orchard care. On the other hand, total planted area has remained stagnant for years, and there’s been a rise in greening cases,” the analyst said. “Temperatures are climbing year after year, and while rainfall has improved recently, I’m still doubtful we’ll reach 320 million boxes.”

Expectations of a milder climate this year underpin projections for a better crop. Mr. Padilha believes orange juice futures in New York will fluctuate based on the official harvest estimates, the first of which will be released in May by Fundecitrus, Brazil’s citrus defense fund.

“A figure closer to 260 million boxes could push prices up. But if it’s above 300 million, we could see further declines,” he said, noting that early optimism already prompted some investors to unwind long positions.

Despite the falling prices, there is little indication that global demand for orange juice will rebound in the short term—a point even acknowledged by CitrusBR, the industry group representing Brazil’s largest juice exporters.

“The transition from futures prices to the consumer market doesn’t happen quickly,” Mr. Padilha noted. “Large buyers, like juice manufacturers, locked in prices before the rally, delaying any pass-through to consumers. The same holds true now, with prices falling—it won’t immediately lead to a boost in consumption.”

A recent Financial Times report noted that consumers in Europe and the U.S. have been buying less orange juice not just because of price but also due to declining quality. Diseased trees have produced more bitter fruit, and scarcity has forced producers to be less selective with blends.

CitrusBR executive director Ibiapaba Netto told Valor that the organization warned clients last year that early-season deliveries would be “more heterogeneous.” The orange harvest includes early, mid-season, and late varieties. Early fruit reaches factories first but tends to have higher acidity—generally balanced by blending with juice from the previous crop. “However, we didn’t have any leftover stock, so we couldn’t deliver the ideal product,” Mr. Netto said.

Retail demand for reconstituted orange juice—made from frozen concentrate—fell 24.5% in the U.S. during the four-week period ending November 1, 2024 (the latest data available), according to Nielsen. Fresh juice consumption declined by 0.9% over the same period.

“When consumers face high prices, they end up choosing products they perceive as higher quality and healthier,” Mr. Netto said.

He believes that lower prices and a return to better juice quality could help revive demand. “But that’s more a hope than a real outlook,” he added.

Source: Valor International

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