Global orange juice prices have surged to their highest level in two years, fueling the rise in food prices.
According to financial information firm FactSet, as of the 20th (local time), the futures price of frozen concentrated orange juice exceeded $3.91 per pound, marking an all-time high. This represents an 85% increase compared to the same month last year ($2.11). The orange juice futures price has been hitting new weekly highs, rising more than threefold over the past two years since the end of 2021.
The sharp rise in orange juice futures prices stems from reduced supply due to poor crop conditions. The world's largest orange-producing regions, Florida in the United States and Brazil, have suffered significant losses of orange trees due to consecutive hurricanes, and the spread of a plant disease called 'citrus greening' has caused orange harvests to plummet to record lows.
Harry Campbell, an analyst at market research firm Mintec, said, "The spread of citrus greening is leading to poor global orange crop yields," adding, "Farmers are trying to minimize damage, but there are no signs of the disease easing."
Steve Johnson, a farmer operating a 600-acre (approximately 2.43 million square meters) orange farm in Hardee County, Florida, said, "Orange trees infected with citrus greening drop their fruit earlier than the normal harvest season, and some even wither and die," adding, "Harvest yields, which used to be 500 to 600 boxes per acre, have sharply declined to 150 to 200 boxes after infection damage."
The U.S. Department of Agriculture expects Florida's orange production this year to fall to 15.8 million boxes, a 62% decrease from last year due to poor crop conditions. There are also forecasts that supply will worsen as farmers give up orange cultivation amid ongoing poor yields and rising labor costs.
Despite a steady decline in global consumption, the shortage of orange juice supply is expected to continue for the time being. The Wall Street Journal (WSJ) predicted, "With a trend favoring beverages with lower sugar content, demand for orange juice is weak, and recent price increases have further reduced the number of orange juice consumers, so demand for orange juice is expected to continue declining over the next several years."
Orange juice is classified among the five major soft commodities, along with raw sugar, coffee beans, cocoa, and cotton. As prices of soft commodities used in general consumer goods soar, consumers suffering from prolonged inflation are expected to face even greater hardships.
Consumer goods companies are uniformly raising prices in response to rising raw material costs. According to market research firm Nielsen, the average price of orange juice in U.S. grocery stores over the four weeks since the 7th has risen more than 10% year-over-year to $9.18 per gallon.
Market experts are predicting further increases in orange juice prices. According to the U.S. Commodity Futures Trading Commission, investors such as hedge funds have bet on rising orange juice futures prices for 95 consecutive weeks rather than declines.
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