Orange Juice Outlook for Selected Countries

Orange Juice Outlook for Selected Countries

Orange juice production in the major Northern Hemisphere producing countries in 1998/99 is forecast at 1.0 million metric tons, 65 degrees brix, 20 percent below the previous year’s record output. The United States and Mexico account for most of the reduction in orange juice output, due to smaller orange harvests. Northern Hemisphere orange juice exports in 1998/99 are forecast to decrease 13 percent to 237,000 tons, based on significantly lower Mexican exports. U.S. exports in 1998/99 are forecast to approximate the previous year’s record shipments, as stocks are expected to be drawn down to offset lower production. U.S. orange juice exports reached a record 105,586 tons in 1997/98, slightly above the previous year’s shipments.

Summary: Northern Hemisphere

Orange juice production in 1998/99 in selected producing countries in the Northern Hemisphere is forecast to decrease by 20 percent to 1.0 million metric tons (65 degrees brix). All of the selected major orange juice producing countries are expected to have lower production.

Total orange juice exports in 1998/99 for selected countries in the Northern Hemisphere are forecast at 237,000 tons, 13 percent below the previous year’s shipments. Mexico is expected to account for most of the decline in exports.

United States

U.S. orange juice production in 1998/99 is forecast at 880,000 metric tons, 20 percent below last season’s output. Fewer oranges will be processed in 1998/99, as a result of a smaller orange harvest in Florida. The Florida frozen concentrate orange juice (FCOJ) yield is forecast at 1.57 gallons (42 degrees brix) per box.

U.S. orange juice exports in 1998/99 are forecast at 105,000 tons, roughly the same as the past two years. Major U.S. customers are the European Union (EU), Canada, Japan, and Korea.

Imports of FCOJ in 1998/99 are forecast at 250,000 tons, up 15 percent from the previous year. Brazilian owned processing plants in Florida are importing Brazilian FCOJ (65 degree brix) into Florida and re-exporting from 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 1998/99 are forecast to decrease significantly as stocks are drawn down to offset the lower juice production.

Mexico

Mexico’s orange juice production in 1998/99 is forecast at 33,000 tons, 50 percent below last year’s output due to the smaller availability of oranges for processing. FCOJ production in Mexico depends heavily on the international price of FCOJ. Lower domestic orange production and current relatively low international FCOJ prices will make it difficult for processors to compete with the fresh market for the smaller orange harvest.

Mexico’s orange juice exports in 1998/99 are forecast at 30,000 tons, down 52 percent from shipments in 1997/98. 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 1999 of 7.862 cents per liter 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, 8.08 cents per liter for 1999, 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 the year 2003.

Spain

Spain’s orange juice production in 1998/99 is forecast at 38,000 tons, 10 percent below the 1997/98 level. A decrease in deliveries to processors is expected due to a smaller 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.

Orange juice exports in 1998/99 are forecast at 60,000 tons, 6 percent below the previous year’s shipments, based on the smaller harvest. The bulk of Spain’s orange juice exports go to traditional export markets in the European Union, 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.

Italy

Orange juice production in Italy is forecast to decrease by 9 percent in 1998/99. The lower orange juice production is the result of a smaller orange crop and less fruit available for processing. Both imports and exports are expected to remain stable, at 4,000 and 20,000 tons, respectively.

There is a growing demand in Italy for 100 percent pure, not from concentrate juice. Pure juice in small packages and fresh squeezed juice available at snack bars continue to be popular drinks.

Greece

Greece’s orange juice production in 1998/99 is forecast at 14,400 tons, 9 percent below last year’s record production. 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 5,500 tons in 1998/99, 15 percent below last year’s shipments.

Morocco

Moroccan orange juice production is forecast to decrease slightly to 9,500 tons in 1998/99. In 1996/97 citrus processing was down to the lowest level in 10 years, 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 changed dramatically as production began to recover. FRUMAT, Morocco’s main juice producer, became the outlet for farmers who faced low prices because of the bumper harvest. The quality was also too low for the fresh market or export.

Orange juice exports in 1998/99 are forecast at 8,000 tons, 33 percent above last year’s shipments. Morocco’s orange juice is normally exported to the European Union, mainly France and Germany.

Japan

Japan’s imports of orange juice in 1998/99 are forecast at 90,000 tons, 8 percent below last year’s revised imports. Although fruit juice beverages compete heavily with other 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 an average of 70 percent of total Japanese imports of orange juice, while the United States ranks second with a 24 percent market share.

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 is the main supplier of Japan’s imports of SSOJ.

Korea

Korean orange juice imports in 1998/99 are forecast at 45,000 tons. The onset of the recent economic crisis has reduced consumer demand for juice drinks. 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 1998/99 (1999 harvest).

Brazil

The U.S. Agricultural Attache estimates the Sao Paulo’s 1998 orange crop (marketed in 1998/99) at 320 million 40.8 kilo boxes, unchanged from previously reported. However, Brazil’s 1998/99 (marketing year 1997/98 in the supply and utilization tables) orange juice production forecast has been increased by 15 percent to 1.07 million tons, based on a higher volume of oranges delivered for processing than earlier expected. Brazil’s 1998/99 orange juice export forecast was increased by 13 percent to 1.18 million tons based on stronger than expected shipments to date. Ending stocks are expected to be lower because of the lower production estimate and higher exports.

For further information on production, supply, distribution, and trade contact Mark Petry, Horticultural and Tropical Products Division, (202) 720-0897. For information on U.S. marketing opportunities, contact Ted Goldammer at (202) 720-8498.

Last modified: Tuesday, May 08, 2001