Orange Juice Prices Explained

Orange juice prices showed tailwinds as adverse weather conditions affected key market suppliers. 

Brazil (which accounts for 70% of the world’s orange juice supply) faced several seasons of extreme weather conditions that affected its output. Also, a spreading bacterial tree disease (citrus greening) destroyed 40% of Brazilian citrus plantations. This translated to a reduced 7.1% crop volume production. 

While Florida’s orange farms have been recovering from 2 consecutive hurricanes, citrus greening slashed its production by 93% and forced growers to implement costlier measures to manage the disease. These contributed to surging orange juice prices in the U.S.

On the other side of the border, Mexico’s adverse weather conditions lead to diminishing fruit quality and size. The market experiences tight supply with no frozen concentrated juice available. 

Why are orange juice prices fluctuating?

1. Climate Change and Diseases

The alternating severe drought and excessive rainfall greatly affect productivity in orange-producing countries.

For instance, hurricanes and late freezes badly damaged orange trees’ productivity in Florida. Additionally, citrus greening (the most serious citrus plant disease in the world) continuously affects crop yield, leading to a 51% decline in American oranges. Overall, this causes domestic low supply and soaring orange juice prices in the market.

2. Inflation

Price inflation still exhibited an upward trend despite improvements in the economy. The food sector experienced even higher rates due to global supply chain disruptions and conflicts in major countries. As a result, the orange juice price increase hovers around 10%.

3. Concentrated Orange Juice (FCOJ) Prices

FCOJ is a frozen orange juice concentrate. This ingredient is important in making orange juice. Any price fluctuations in FCOJ production inputs such as orange oil and orange pulp will have a direct impact on orange juice prices.

4. Consumer Trends

Changes in consumer preferences stem from health concerns. Ultimately, this purchasing attitude shapes the shifting demand and prices of orange juice in the market.

Which variables impact the price of orange juice?

• Climate Change and Diseases
• Inflation
• Concentrated Orange Juice (FCOJ) Prices
• Consumer Trends
• Government Policies
• Exchange Rates

Where does orange juice come from?

Sweet orange trees originated in the tropical regions of Asia, specifically in the eastern region of Assam in India, northern Myanmar, and western Yunnan in China.

Arab empire expansion and trade helped the orange tree variety to reach Europe and other countries in the world. Additionally, the Spanish explorers introduced this variety to the Americas in the 15 century. Furthermore, British colonizers brought this citrus fruit to Australia in the 18th century.

Considered as not palatable because of its taste, some herbalists used orange fruit as a medicinal syrup. For example, the British Royal Navy used orange to prevent scurvy, a disease caused by a lack of vitamin C.

Overall, the majority of this refreshing drink comes from the top citrus producer in the world with Brazil sitting on the number one spot because of its yearly 1.3 million tons of orange juice production. The United States, Mexico, the European Union, and South Africa follow distantly.

What is the future price of orange juice?

Orange juice availability and prices largely rely on the changing weather conditions. Given the global climate outlook, the commodity’s marketability is expected to remain strong.

Rising temperatures and unpredictable weather patterns lead to increased heat stress and water scarcity, affecting fruit set, growth, and overall yield. Frequent citrus greening destroyed orange groves, causing stunted growth, premature fruit drop, and reduced fruit quality.

These challenges forced growers to adopt new agricultural practices and invest in research to develop disease-resistant varieties and more resilient farming techniques.

The demand for concentrated orange juice has surged due to ready-to-drink beverages and energy drink applications. Tropicana and Minute Maid have innovated by offering convenient, on-the-go options that cater to health-conscious consumers.

These products highlight natural and organic ingredients, appealing to a market that values transparency and sustainability. Additionally, energy drink brands incorporated orange juice to create healthier alternatives to traditional energy drinks, leveraging its natural sugar and vitamin C content.

These innovations not only meet consumer demands but help stabilize orange juice prices by diversifying its applications and expanding its market reach. Overall, due to its market volatility and the decreasing crop yield because of extreme weather disturbances, experts see a bullish market with a $10 price by 2027.