The orange crisis continues to intensify

By: Trademagazin Date: 2024. 06. 19. 11:43

Brazil, which as the world’s largest producer of orange concentrates has an 80% market share in the European Union, is warning of a significant drop in orange production. According to forecasts, the amount of oranges in 2024 is expected to decrease by 25% compared to last year, which could bring the worst orange harvest in the last 36 years. Among other things, SIÓ-Eckes Kft. is trying to mitigate the short- and long-term effects of these on the domestic customers by further increasing its operational efficiency and optimizing its processes.

The orange harvest on the American continent – from which practically 100% of the orange juice comes to Europe – has been continuously decreasing since 2020. The situation became critical in 2023, when, in addition to the problems caused by extreme weather conditions, a bacterial infection called “citrus greening” spread in the Florida and Brazil production areas, which caused a significant decrease in yields and an increase in raw material prices. The experts are predicting an even worse crop yield for this year: the lowest orange crop in the last 36 years is expected in Brazil, a 25% decrease compared to the previous year, which was already below average. As a result – while in 2022 we saw prices of around USD 2,000 per ton, in 2023 we can see prices of USD 4,200-4,300 per ton – by 2024, the world market price of oranges is expected to be USD 6,000 per ton.

Overall, we can expect a decrease of 1.7 billion liters of orange juice production this year (compared to the average of 7 billion liters of orange juice per year): this means that an EU citizen will receive an average of 4 liters less orange juice than in 2023 – despite the fact that demand would reach last year’s level. Stable demand and low supply lead to high prices: in Hungary in 2024, the average consumer prices for 100% orange juice rose by 79% compared to the same period in 2022. In addition, consumption also fell significantly when examining the same periods: in the first four months of this year, the amount sold decreased by 45.5% compared to the same period in 2022 (retail market, chilled and non-chilled 100% orange juices, Source: Nielsen).