Orange Juice Outlook for Selected Countries
|Orange juice production in the major Northern Hemisphere producing countries in 1997/98 is forecast at a record 1.29 million metric tons, 10 percent above the previous year's level. A record orange crop and processing in the United States account for the record orange juice output. These large supplies and low prices will continue to challenge the marketing ability of exporters. Northern Hemisphere orange juice exports in 1997/98 are also forecast at a record, based on likely higher U.S. exports. U.S. orange juice exports in 1996/97 reached a record 104,450 tons, 14 percent above the previous year's shipments. Awareness of the good quality of U.S. orange juice and private industry market promotion efforts helped boost U.S. exports.|
Summary: Northern Hemisphere
Orange juice production in 1997/98 in selected producing countries in the Northern Hemisphere is forecast to increase by 10 percent to 1.29 million metric tons (65 degree brix). All of the selected major producing orange juice countries are expected to have increased production with the exception of Italy and Turkey. U.S. orange juice accounts for 88 percent of the total Northern Hemisphere 1997/98 orange juice production forecast.
Total orange juice exports in 1997/98 for selected countries in the Northern Hemisphere are forecast at 254,897 tons, 9 percent above the previous year's shipments. Higher exports are forecast for the United States, Morocco, and Mexico, while orange juice shipments from all other selected countries are expected to decrease or remain the same in 1997/98.
U.S. orange juice production in 1997/98 is forecast at a record 1.13 million metric tons, 10 percent above last season's output. More oranges will likely be processed in 1997/98 as a result of an expected record orange harvest in Florida. The Florida frozen concentrate orange juice (FCOJ) yield is forecast at 1.55 gallons (42 degrees brix) per box, 1 percent below the 1996/97 yield. Florida is expected to account for 96 percent of total U.S. orange juice output.
U.S. orange juice exports should continue to expand in 1997/98, with exports forecast at a record 120,000 tons, 15 percent above last year's shipments. Major U.S. customers are the European Union (EU), Canada, Japan, and Korea. The EU accounted for 42 percent of total U.S. orange juice exports in 1996/97 (December/November). Canada, Japan, and Korea accounted for 27, 9, and 4 percent, respectively. Increased demand for higher quality single strength orange juice and strong marketing efforts by U.S. companies have boosted exports in recent years.
Imports of FCOJ in 1997/98 are forecast at 160,000 tons, down 33 percent from the previous year due to large supplies. Recently, Brazilian owned processing plants in Florida have imported Brazilian FCOJ (65 degree brix) into Florida and re-exported the U.S. "not from concentrate" juice as single strength (42 degree brix), a higher quality juice product. This trend is likely to continue.
Ending stocks in 1997/98 are forecast to increase significantly due to the projected record juice production.
Mexico's orange juice production in 1997/98 is forecast at 41,000 tons, slightly above last year's output. FCOJ production in Mexico depends heavily on the international price of FCOJ. Current low international prices will make it difficult for processors to compete with the fresh market for the domestic crop.
Mexico's orange juice exports in 1997/98 are forecast at 39,000 tons, up 2 percent from shipments in 1996/97. The United States is the main market for Mexican FCOJ with Japan and the European Union also important customers.
Under NAFTA, Mexico has access to the United States market for 40 million gallons of FCOJ, single strength equivalent (or 28,452 tons, 65 degrees brix) at a duty of 4.625 cents per liter. Beyond the 40 million gallon level, and up to 70 million gallons SSE, the full NAFTA rate for 1998 of 8.094 is applied. If snapback price conditions are not in effect, the NAFTA rate would continue to be applied beyond the 70 million gallon level. However, if price conditions are in snapback, the full MFN rate, currently, 8.32 cents per liter for 1998, would be assessed on all imported volumes beyond the 70 million gallon threshold. This basic mechanism will remain in effect during the 15-year phase-in period agreed upon in the NAFTA negotiations, although the quantity trigger level will be increased to 90 million gallons SSE in year 2003.
Spain's orange juice production in 1997/98 is forecast at 43,000 tons, 9 percent above the revised 1996/97 level. An increase in deliveries to processors is expected due to a larger orange harvest. Oranges used in Spain to produce juice are mainly those that cannot be marketed for fresh consumption. Most orange processing plants in Spain are located in the Valencia region.
Spain's orange juice exports in 1997/98 are forecast at 56,000 tons, 3 percent below last year's shipments. The bulk of orange juice exports are expected to go to traditional export markets in the EU such as France, Germany, and the United Kingdom. Strong competition from Brazil, Israel, and other key producing Mediterranean countries represent the principal obstacles to the expansion of Spanish citrus juice exports to third countries.
Greece's orange juice production in 1997/98 is forecast at 15,400 tons, 4 percent above last year's revised estimate. In the past, growers were able to take advantage of the withdrawal system to dispose of excess fruit. However, withdrawal quantities and prices are being reduced annually through the year 2002. As a result, quantities of fresh oranges to be processed are expected to increase. Production of concentrated orange juice in Greece encounters strong competition from imported frozen Brazilian product. Greece's orange juice exports, which are mainly destined to Eastern Europe, are forecast at 3,000 tons in 1997/98, 14 percent below last year's shipments.
Moroccan orange juice production is forecast to increase sharply to 15,900 tons in 1997/98. In 1996/97 citrus processing was down sharply with only 2 percent of the crushing capacity being used. High fresh citrus prices in the local market and failure to appeal to producers caused the largest processor to close its mills temporarily. In 1997/98 however, the citrus situation is expected to change dramatically as FRUMAT's role will be crucial in absorbing excess citrus production. The Government of Morocco has announced that it intends to support FRUMAT financially in order to enable it to purchase excess local production, thus preventing serious financial difficulties for citrus growers.
Orange juice exports in 1997/98 are forecast at 8,500 tons, 85 percent above last year's shipments, due to the expected increase in processing. Morocco's orange juice is normally exported to the European Union, mainly France and Germany.
Japan's imports of orange juice in 1997/98 are forecast at 90,000 metric tons, 2 percent above last year's imports based on expected increased domestic consumption and lower prices. Although fruit juice beverages compete heavily with low-calorie beverages, organic fruit and vegetable juices are extremely popular. Companies such as Kirin Tropicana and Zenno currently market various types of organic fruit juice. Japanese juice processors are expected to follow suit in the future.
Brazil is the major supplier to Japan, accounting for 70 percent of total Japanese imports of orange juice. The United States ranks second with a 24 percent market share. A Brazilian bulk orange juice storage terminal, inaugurated in 1993, has been operating at less than capacity. Japanese importers have found it more economical to receive FCOJ imports in 200 liter drums.
Japanese imports of single strength orange juice (SSOJ), although small compared to FCOJ, have increased significantly in recent years. Imports of SSOJ are expected to continue strong as consumers show a growing preference for more natural and fresh orange juice taste. The United States supplies the vast majority of Japan's imports of SSOJ.
Korean orange juice imports in 1997/98 are forecast at 56,500 tons, about the same as the previous year's imports. On July 1, 1997, orange juice imports were liberalized based on a Record of Understanding (ROU) signed between Korea and the United States on Agricultural Market Access in the Uruguay Round. It states that "Orange juice shall be liberalized by July 1, 1997, with nothing but a bound 60 percent duty remaining." Brazil is the main supplier of orange juice to Korea, followed by the United States.
Major Producers in the Southern Hemisphere
It is too early to make reliable forecasts for Southern Hemisphere countries for 1997/98 (1998 harvest).
The Sao Paulo's 1997 orange crop (marketed in 1997/98) is estimated at 423 million 40.8 kilo boxes, 16 percent above the previous year's output. See Table 5 on page 42 for more detail.
Brazil's 1996/97 orange juice production estimate (marketed in 1997/98) is estimated at 1.36 million tons, 9 percent above the previous estimate. This increase is mainly due to a larger harvest and more oranges being processed than earlier expected. Most processing companies have already finished their operations, and those which are still processing, are expected to work until the end of January or the beginning of February.
In 1996/97 (MY 1997/98), Brazil's orange juice exports are estimated at 1.2 million tons, 3 percent above last year's shipments. Ending stocks are expected to be larger because of the higher production estimate.
Outlook for Sao Paulo orange crop
On January 15, the Institute of Agricultural Economics (IEA) of Sao Paulo released its first orange production forecast for the 1998 Sao Paulo crop (marketed in 1998/99) at 369.6 million boxes. On January 23 the Brazilian Association of Citrus Exporters (ABECITRUS) released an unofficial forecast of 325 million boxes for the new crop. ABECITRUS is scheduled to release an official forecast for the new orange crop in May. According to some sources, oranges delivered for processing may range from 220 to 260 million boxes. The Agricultural Trade Officer in Sao Paulo will release his first forecast for the 1998 Sao Paulo orange crop in early June.
According to Post contacts, most sources expect the 1998 Sao Paulo orange crop to be lower than the current season due to adverse weather conditions during flowering; an increase in problems related to citrus canker and Citrus Chlorosis Variegated (CVC); and some citrus growers abandoning groves due to financial and disease problems.
For further information on production, supply, distribution, and trade contact Debbie Seidband, Horticultural and Tropical Products Division, (202) 720-6877. For information on U.S. marketing opportunities, contact Ted Goldammer at (202) 720-8498.