Orange Juice Outlook for Selected Countries

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), as all 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 900,000 tons, 19 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 a record 1.63 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. In addition to FCOJ, a key export from the United States is "not from concentrate" juice, single strength (42 degree brix), which is a higher quality juice product and is rapidly increasing in importance as an export commodity. This trend is likely to continue. 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, which is often mixed with Florida juice or juice from other origins in order to get the optimal mixture and then marketed in the United States.

 

Ending stocks in 1998/99 are forecast to decrease 42 percent to 180,000 tons, as stocks are drawn down to offset the lower juice production.

 

Mexico

 

Mexico’s orange juice production forecast for 1998/99 was increased by 15 percent, to 38,000 tons, 43 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 35,000 tons, down 45 percent from shipments in 1997/98. The United States is the main market for Mexican FCOJ, though Japan and the European Union are 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 30,000 tons, 29 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 58,000 tons, 33 percent below the previous year’s revised shipments. 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 5 percent to 32,000 tons 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 22,000 tons, respectively.

 

Greece

 

Greece’s revised orange juice production in 1998/99 is forecast at 10,250 tons, 27 percent below last year’s record production. The orange supply was sharply decreased due to poor weather throughout the growing season, thus reducing the amount of oranges available for juice. Greece’s orange juice exports, which are mainly destined to Eastern Europe, are forecast at only 2,500 tons in 1998/99, 58 percent below last year’s shipments.

 

Morocco

 

Moroccan orange juice production is forecast at 7,000 tons in 1998/99, 45 percent below the previous year. In 1996/97, citrus processing was at 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. However, in 1997/98, 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. However, in 1998/99, the fresh market offered better prices relative to the financially weak FRUMAT.

 

Orange juice exports in 1998/99 are forecast at 6,000 tons, the same as last year’s revised 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 were revised up to 100,000 tons, 11 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 supplies about 70 percent of Japan’s imports of SSOJ.

 

Korea

 

Korean orange juice imports in 1998/99 are forecast at 49,000 tons, an increase of 18 percent. The onset of the recent economic crisis has reduced consumer demand for juice drinks. However, frozen orange juice demand has been rising steadily in tandem with consumer’s expectations about the economy. Processors are optimistic that the market will recover to the 1996 level of consumption by the end of 1999. Korean consumer preference for premium juice from non-frozen citrus has been leading the recovery. Brazil is the main supplier of orange juice to Korea, suppling greater than 70 percent of the frozen orange juice in the 97/98 marketing year. Sources expect that the U.S. niche in the Korean FCOJ market to remain stable.

 

 

Southern Hemisphere

 

Brazil

 

Brazilian frozen concentrated orange juice production for the 1998/99 season (Brazilian 1999/00 marketing year) is forecast at 1.26 million tons, an increase of 9 percent from the previous year’s revised forecast. The U.S. Agricultural Attache forecasts Sao Paulo’s 1998/99 orange crop (1999 harvest) at 395 million 40.8 kilo boxes, an increase of 15 percent from the previous year. Brazilian processors are forecast to decrease the amount oranges processed to roughly 68 percent of the total harvest, versus 73 percent of the crop processed the previous year. The larger total orange crop is expected to result in higher total juice production, while lower prices due to higher fruit availability are expected to trigger a rebound in fresh orange consumption.

 

The total orange juice production estimate for the 1997/98 season was increased by 8 percent, to 1.16 million tons. Orange juice production was higher than previously forecast because concern about fruit availability led processors to offer significantly higher prices late in the season, which diverted fruit to processors from the domestic fresh market.

 

Brazil’s 1998/99 orange juice export forecast was increased slightly to 1.2 million tons as the European Union, the major export market for Brazilian FCOJ, is not expecting significant growth in demand. Ending stocks are forecast 16 percent higher, at 229,500 tons, as total export demand is not expected to meet the increased level of production.

 

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