The Brazilian orange crop, which started in July 2020 and is expected to end in June 2021, is forecast at 382.8 million boxes (15.6 million metric tonnes – MMT), a decrease of 19% compared with the previous season. The decline is due to the alternate bearing phenomenon in the São Paulo citrus belt, i.e. a reduction in crop size after the previous large production season because nutrient reserves are less, resulting in fewer fruits per tree; and weather related issues, mainly high temperatures in September and October 2019 affecting the setting of young fruits and less rainfall in March and April 2020 resulting in smaller fruit sizes.

According to Fundecitrus, the commercial area of the state of São Paulo and the western part of Minas Gerais, which represents approximately 75% of total production area, should produce 287.8 million boxes (11.74 MMT), a significant 100 million boxes reduction from the previous season. The forecast takes into account the following varieties: Hamlin, Westin, Rubi, Valencia Americana, Valencia Argentina, Seleta, Pineapple, Pera Rio, Valencia, “Folha Murcha” Valencia, and Natal.

According to the Brazilian Geography and Statistics Institute (IBGE), production from other states is projected to go down 2 million boxes from the previous crop to 95 million boxes (3.87 MMT). Total Brazilian orange consumption is expected to go down to 120 million boxes (4.9 MMT), while total oranges for processing is expected to be reduced by 25% to 262 million boxes (10.7 MMT). The demand for orange oil remains high, especially with COVID-19 increasing demand for cleaning and home care applications, and the future production predictions have triggered price increases for orange oil, terpenes and d’limonene. Moreover, little oil carryover from the previous season and the effects of social distancing measures due to COVID-19 resulting in slower picking of fruit and additional costs of transporting pickers to and from farms, is causing the market to rise at a faster rate than initially anticipated. In addition, reduced availability of containers and shipping vessels is creating additional logistical difficulties putting further upward pressure on prices. The below average rainfall from March onwards has impacted fruit development and could create reduced crop availability and further upward price pressure.

Brazil’s production of orange juice is forecast to drop 22% to 1.022 MMT. The decline is due to expected lower supply availability of fruit for processing. The São Paulo industry is expected to process 238 million boxes of oranges for orange juice production, accounting for 942,000 MT of juice. Other producing states should deliver 24 million boxes, accounting for 80,000 MT of juice. Consumption and stocks are both estimated slightly higher while exports are forecast 15% lower with the drop in production. Even with lower supplies Brazil remains the largest producer and is projected to account for over three quarters of global orange juice exports.