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August 1997
Total Brazilian orange juice production for 1997 is forecast at 1.25 million tons, a 10 percent increase over the previous year. The Sao Paulo region contributes more than 98 percent of the processed orange juice production. Production in this region is estimated at 1.22 million tons, a 10 percent increase from the previous season, due to the greater volume of oranges for processing.
Brazilian exports in the 1997 season are forecast to increase 2 percent to 1.16 million tons. This increase is mainly due to expected export growth in Eastern European and Asian markets.
Brazil has long been Florida's main orange juice competitor as well as an important supplier to the U.S. domestic market. However, with the large Florida orange harvests reducing the need for orange juice imports, major processors in Brazil are buying their way into Florida's citrus industry. There is a greater opportunity for major processors in Brazil to invest in Florida because the current oversupply situation and low prices are forcing some Florida citrus bulk processors to sell their holdings. According to trade sources, reasons for processors in Brazil investing in Florida are: maintaining a U.S. market presence in the long term, supplying customers year round by processing in Florida in the Brazilian off-season, and benefitting from the U.S. drawback system. Some sources believe these investments will have a positive impact on the Florida citrus industry by expanding exports of Florida orange juice and making the Florida industry more efficient overall. Other sources feel threatened by the recent Brazilian processor investments.
Australia
Australia's orange juice production in 1997 is forecast to decline 8 percent to 16,009 tons. Production is down mainly due to low international FCOJ prices.
Strong domestic demand for fresh juice products has dampened the effect of low export prices for concentrate. The growth in the single strength "fresh" orange juice means that this product will attract a large percentage of the domestic fruit available for processing. This means that lower quality product will continue to be imported to satisfy consumer demand for a cheaper product. Imports of FCOJ increased substantially in 1996 due to low international prices. The fall in Australian import tariffs in recent years, and a strong Australian dollar, have also made imports more attractive.
South Africa
South African orange juice production in 1997 is forecast at 12,057 tons, an 11 percent decrease over the previous season. This decrease is mainly due to the smaller amounts of fresh oranges going towards juice production. South Africa orange juice exports are forecast to decrease 55 percent in 1997 based on the expected lower juice production.
Argentina
Orange juice production in 1996 is revised down 13 percent to 10,000 tons. A smaller orange harvest due to unfavorable weather conditions is the reason for the lower juice output. Production in 1997 is forecast at the 1996 level due to a drought in the Entre Rios region which affected the early varieties of oranges, lowering juice yields.
Argentinian orange juice exports in 1997 are expected to decrease due to low international prices.
Revisions for major producers in the Northern Hemisphere
Northern Hemisphere orange juice production for 1996/97 is estimated at 1.21 million metric tons, up 9 percent from the February forecast. Since the February forecast (see February 1997 issue of World Horticultural Trade & U.S. Export Opportunities), an increase in the production estimate for the United States more than offset decreases for Italy and Mexico.
However, Northern Hemisphere orange juice exports for 1996/97 are forecast at 253,352 tons, 3 percent below the February forecast. Expected reduced shipments from Mexico account for the drop in Northern Hemisphere exports.
United States
United States orange juice production in 1996/97 is estimated at a record 1.035 million metric tons, 5 percent above the February forecast and 13 percent above the previous year's output. Higher juice yields and more fresh fruit going toward processing are the main factors for the increase in production. The Florida frozen concentrate orange juice (FCOJ) yield is estimated at 1.58 gallons (42 degree brix) per box compared with 1.52 used for the February estimate. Florida accounts for 95 percent of total U.S. orange juice production.
U.S. orange juice exports in 1996/97 are forecast at a record 115,000 tons, 25 percent above last year's shipments and 15 percent above the previous forecast based on significantly higher shipments to date than expected. U.S. orange juice exports to date (December-May 1996/97) are up 40 percent due to sharp increases in exports to western Europe, most notably to Switzerland and Belgium-Luxembourg. This sharp increase in sales to western Europe more than offsets declines to most other regions of the world.
U.S. orange juice imports for 1996/97 are forecast at 165,000 tons, 11 percent below the previous season's imports unchanged from the February forecast. Imports to date (December-May 1996/97) are 14 percent above imports during the same time period a year ago based on larger than expected purchases from Brazil. However, the pace of imports is expected to slow as the year progresses based on the record U.S. production.
Mexico
The 1996/97 orange juice production forecast was reduced by 17 percent to 40,000 tons. Fewer oranges are expected to be processed due to low international FCOJ prices.
Exports of FCOJ for 1996/97 are forecast to decrease 17 percent from the February estimate, due to the expected smaller production. This drop in exports is mainly due to lower demand in response to larger international supplies. According to Mexican industry officials, Mexico is expected to fill 100 percent of the 1997 U.S. NAFTA quota, with the remainder going to Japan and the European market.
There were no other significant changes for Northern Hemisphere countries.
(For more information on supply, distribution, and trade, contact Debbie Seidband at 202-720-6877. For information on U.S. marketing opportunities, contact Ted Goldammer at 202-720-8498.)
1/ Indicated as 1996/97 in the accompanying tables. For actual marketing year period, see footnotes on table.
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