Orange oil is extracted by simple pressure from the outer coloured part of the Citrus sinensis' peel. Oranges are widely cultivated in tropical and subtropical climates for the sweet fruit and commercially for essential oil extraction.
Orange oil is a by-product of the juice industry. Oil is cold pressed from the peel of the fruit, after juice extraction and is widely used across the flavour and fragrance industry. Sweet orange (citrus sinensis) is around 90% d’limonene, a product used across many more industries. Approximately 40% of global oranges are processed for juice and oil with 60% solely used as a fresh fruit for consumption.
Brazil has the largest production of fresh oranges and also it processes more orange than any other country making it the largest producer of orange oil and d’limonene (orange terpenes) in the world. Harvesting can be almost 12 months of the year due to the widespread distribution of plantations, however it is unusual for any significant production during February – April. Therefore we usually consider May - December as a typical harvesting period.
Brazilian oranges make up for around 34% of the world market – approximately 17 million tons+/- from a global estimate of 50 million tons +/- of fresh fruit. The Brazilian state of São Paulo contributes around 80% of the country’s production figures.
It's been a challenging time of late for the world's largest producing country and they're forecasting a sharp reduction of 18.3% in the total 2016/17 crop. To read more about today's conditions click here.
You may have recently read in our Market reports details of the challenges faced by the industry due to Citrus Greening. Click here for more details of the global impact of this wide spreading disease.
The 2018-2019 orange crop forecast update for São Paulo and West Southwest Minas Gerais citrus belt, published on September 10, 2018 by Fundecitrus, is 273 million boxes. This figure corresponds to a decrease of 5.19% in relation to the estimate published in May 2018.
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 a further crop reduction. There have been considerable delays in fruit picking due to the desired quality not being achieved, so this has caused processing activities to be slow.
In spite of such clear warnings of a lower 2018-19 crop forecast, orange oil prices have not really increased over the past few months. Though citrus markets are particularly difficult to analyse this could be for a few reasons. Buyers are waiting to fulfill their demand in the hope that prices may fall further. Furthermore, weakness in the US d´limonene market could also have an effect on price. The best strategy for customers with low volume requirements seems to be to buy on a spot basis. Those who have continuous demand throughout the year are advised to have annual contracts at fixed prices to fulfill most of their requirements.
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