Orange Oil CP Citrus sinensis Harvest: July - December
In July this year, the USDA released its crop forecast figures for Brazilian orange production of 16.0 million MT for the current Brazilian marketing year July 2018 to June 2019. This is around 23% lower than the last crop. The primary reason behind this year’s low prediction is that the trees are stressed after surprisingly good yields from last season. Consequently, the groves are expected to produce less fruit. Also, the arid weather and high temperatures in São Paulo and Minas Gerais States damaged blossoms, and were big impediments to the fruit setting. Local sources cite insufficient rainfall as another cause of worry and reason for further crop reduction. The industry awaits with great interest the second Brazilian orange crop estimate by Fundecitrus, due to be released on September 10th – coinciding with the opening of IFEAT’s 2018 Cartagena Conference.
Sources from origin reported that the production of Hamlyn orange has been very low. The Pera variety is not projected to be any better.
With the rather drastic plunge in orange production, and the increase in domestic fresh orange consumption, it is evident that oranges available for processing purposes will reduce substantially. The amount processed is projected to drop by 5.0 million MT to 11.1 million MT.
The demand for orange oil remains steady and stock levels remain low. The decline in crop size, and consequently available fruit for processing, will definitely affect supplies. Stocks are somewhat limited and prices are projected to increase for the new crop.
To summarise, there will be restricted quantities of orange oil supply due to decreased crop size, oranges available for processing will be significantly less than the last crop, prices are likely to escalate for the new crop, demand is firm for orange oil because of limited inventory, most sources are reluctant to commit on long term contracts in view of the prevalent uncertainties, and, with the Florida orange crop being extremely low with an unwavering demand, the additional pressure on Brazil is tremendous.