Possibility looms of higher FCOJ prices
Brazilian orange juice processors are talking about a contracted price for processing oranges of around BRL20.00 per box (USD6.13/box), delivered, according to CEPEA.
This is around BRL3.00/box higher than the average price paid this season, and could be reflected in higher prices for FCOJ. The present ‘official’ price for Brazilian FCOJ is around USD2,350 per tonne cfr duty unpaid Rotterdam. On the other hand, the average price paid in the 2016/17 crop was BRL22.00/box. It is believed that Brazil may be looking for higher prices (perhaps as high as USD2,500/tonne) next year. Meanwhile, the independents are around USD100/150/tonne cheaper.
A report delivered by Larissa Popp of CitrusBR (the processors’ association) at the Juice Summit in Antwerp last month estimated FCOJ production for the 2017/18 season at 1.176 million tonnes and the orange harvest for the same season at 374 mln boxes, but cautioned that the 2017 FCOJ carry-out would be, at 107,000 tonnes, the lowest in history. Coupled with declining yields (estimated at 267 fruits per box in 2017/18, and fears about weather conditions, it is likely that orange juice prices will rise again.
Citrus growers are worried about the next orange crop in São Paulo, says CEPEA. Although it is still early, some growers report that the fruit droppage between late August and early September has been as high as 50% (mainly for pear oranges, which are more sensitive to the hot and dry weather in the last months). IEG Vu sources have confirmed this: “The northern part of São Paulo state is suffering a lot,” a contact told IEG Vu, adding that his forecast for the coming eason was for a mere 290 million boxes of fruit.