Orange juice futures hit a record high on mounting fears that citrus greening disease could limit future output in Florida, the top producing state in the United States, and harm the citrus crop in top exporter Brazil as global supplies deplete.
“The disease proliferation continues to be great in Florida, and the chance of a large comeback in production for the new season is limited,” said Judy Ganes, head of J. Ganes Consulting, in an interview. “There are signs that disease is becoming more prevalent in Brazil, which is also experiencing long-term crop problems.”
Early in New York trade, the most active futures gained by the exchange limit of 10 cents before paring some gains.
According to a July 20 study from the US Department of Agriculture, Brazil, the world’s largest juice exporter, will send 1.7% less orange juice to the US than previous year.
Rising prices are also causing a dramatic drop in sales volume. According to figures collated by Nielson and published by the Florida Department of Citrus, consumption in the United States is at its lowest in at least five years, while retail prices peaked at about $9 per gallon in July, up from less than $8 a year earlier.
“Consumers are taking notice and aren’t drinking as much,” Ganes explained. “And once they’ve turned away from a product, they’re unlikely to return.”
