The volume of orange juice exports drops despite the increase in revenue

Brazilian orange juice shipments totaled 658.4 thousand tonnes FCOJ (Frozen Concentrate Orange Juice), generating US$ 1.067 billion in the first eight months of the 2021-22 harvest, according to data from the Department of Foreign Trade (Secex) compiled by the National Association of Citrus Juice Exporters (CitrusBR). Compared to the same period last cycle, volume dropped 1%, but revenue increased by 9.2%.

In a statement, the association – which represents Citrosuco, Cutrale, and the Louis Dreyfus Company, the world’s largest orange juice exporters – emphasized that the volume decline is in line with the scenario outlined since the second half of last year when it became clear that the climatic problems such as drought and frost would harm the supply of fruits in the agricultural belt between São Paulo and Minas Gerais.

Main export destinations

The European Union, the main destination for Brazilian FCOJ, bought 416,100 tonnes between July last year and February, up 0.9% from the first eight months of the 2020-21 harvest cycle and 63.3% from the total. As a result, the revenue generated from these shipments increased 11.3% to US$682.1 million.

Exports to the United States registered a 3% drop in volume, reaching 131.7 thousand tonnes. Conversely, the value of those exports increased by 12.7% to US$ 227 million. “These numbers show how Brazilian orange juice lost its competitiveness in the American market,” says the executive director of CitrusBR, Ibiapaba Netto, in a note.

As previously reported by Valor, one of the main factors that led to Brazil’s lost prevalence in the US market is competition from Mexico. While the Brazilian products pay a US$ 415 fee to enter the country, Mexico is exempt from tariffs.

As for China, Brazilian FCOJ exports reached 51,700 tonnes or US$ 61.3 million, up 60% in volume and 57.2% in value. On the other hand, exports to Japan dropped 1.1% in volume to 30.2 thousand tonnes but grew 15.9% in revenue, reaching US$ 49.4 million.

CitrusBR once again complained of the decreased competitiveness of Brazilian juice since an “export tax” was created through Federal Revenue’s Inquiry Solution nº 2 that has been in effect since April 2019. The rule allows the collection of 34% corporate income tax on tariffs paid to foreign governments as an import tax.

Source: Valor Econômico

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