Orange groves in Florida.

Orange juice manufacturers face a supply crisis and are considering alternative fruits.Brazil and Florida’s orange supplies are declining due to disease and poor weather conditions.It means prices are increasing while suppliers scurry for a solution.

The world’s leading orange juice manufacturers may have to consider using alternative fruits as they face a supply crisis.

A report from Fundecitrus and CitrusBR said that the climate crisis and a citrus disease known as greening have caused Brazilian orange farmers to harvest their smallest crop in decades.

Brazil is the world’s largest orange juice producer and exporter. The report predicted that Brazil’s main orange-producing areas of Sao Paulo and Minas Gerais will harvest 232.38 million 40.8kg boxes this year, a drop of 24.36% compared to the previous year.

“Should this production forecast hold true, this will be the second smallest crop since 1988-1989,” it said.

Florida, the world’s second-largest producer of orange juice, is also facing severe shortages due to disease and poor weather conditions, the Financial Times reported.

Kees Cools, president of the International Fruit and Vegetable Juice Association, told FT that recent shortages mark a “crisis.”

“We’ve never seen anything like it, even during the big freezes and big hurricanes,” he said.

In the past, orange juice providers avoided long-term shortages by freezing juice stock, which can be used for up to two years, the FT said. But even the frozen stock is dwindling because of a three-year shortage build-up, it added.

An aerial image taken on March 14, 2023 shows a worker plucking oranges at an orchard in Arcadia, Florida.

One major problem is citrus greening. This is an incurable disease caused by plant-feeding insects that make the tree’s fruit bitter before ultimately killing the tree.

Since spreading throughout Florida in 2008, citrus greening has had disastrous effects when paired with the climate crisis. In the past 20 years, Cools told the FT, the state’s supply of orange juice declined from 240 million boxes annually to 17 million annually.

Cools said manufacturers may have to consider using a different fruit, such as mandarin, as its trees are more resilient to weather patterns.

However, this would be a lengthy process. The IFU would have to request legislative changes in the Codex Alimentarius food standards code and in the US Food and Drug Administration, FT said.

Meanwhile, Harry Campbell, a commodity market data analyst at research group Mintec, told CNBC that manufacturers are likely to become “less reliant” on orange production by incorporating higher quantities of pear juice, apple juice, and grape juice in their blends.

The financial consequences are already coming into play. Concentrated orange juice futures rose to $4.92 on New York’s Intercontinental Exchange on Tuesday, FT said. That’s almost double compared to the previous year, the outlet added.

Meanwhile, the price of 16 ounces of orange juice cost the average US consumer an estimated $2.41 in 2019, compared to $3.41 by the end of 2023, according to the data gathering platform Statista.

Francois Sonneville, a senior beverages analyst at Rabobank, told The Guardian that consumer demand for orange juice has decreased by around a fifth in the past year because of price increases.

“The global orange juice industry is in crisis,” he said.

“The Florida industry has all but disappeared, and Brazilian groves are plagued by disease, rising costs, and unfavorable growing conditions, leaving global orange juice supplies at their lowest point in decades.”

“Until that point is reached where consumers are no longer willing to pay the premium for orange juice because it is at such low supply, prices will continue to drive up,” Campbell told CNBC.

The International Fruit and Vegetable Juice Association did not immediately respond to a request for comment.

Read the original article on Business Insider

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