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.
Brazil reports a period of stress during the initial months. January witnessed extremely dry weather conditions leading to drought-like conditions. Water was scarce in the entire citrus belt except the southwest, leading to a drop in the yield in the groves. This erratic weather has been persisting for some time, in fact as far back as 2017. The spring rains, which were long overdue was one of the reasons behind the late blooming of the orange trees. Growth was hindered, eventually resulting in a sharp plunge in the number of oranges per tree. The rainfall during the fruit development and harvesting period from May 2018 to March 2019 was also deficient, at least 3% below the historical average. Followed by soaring mercury levels after the flowering, the fruit set and size was affected. There is a marked deviation between final average size in April 2019 against what was projected in May 2018. However, the aberration for each orange variety is attributed to irregular rainfall distribution during fruit harvesting season. The largest margin of deviation was observed in early varieties. This was a direct result of the dearth of water at the beginning of the crop season, which coincided with the harvest of these particular orange varieties. In comparison, the size variation was the least in the Pera Rio variety.
Brazil’s orange crop estimates for the year 2018/19 by Fundecitrus are close to 285.98 million boxes of 40.8 kg each. This figure is a drop of almost 28.2% compared to the previous crop of 398.35 million boxes in 2017-2018 – 11.6% below the crop average in the last decade. The Hamlin, Westin, and Rubi varieties are pegged at 50.70 million boxes with the other early season varieties steadying at 14.66 million boxes. The Pera Rio orange saw an upward jump of 0.58% to touch 79.12 million boxes. Valencia and Valencia Folha Murcha oranges were predicted to deliver 107.91 million boxes, an increase of 0.26%; while the Natal variety anticipates a significant drop of 1.08% to deliver 33.59 million boxes.
The final crop total figures include:
50.70 million boxes of Hamlin, Westin, and Rubi varieties
14.66 million boxes of Valencia Americana, Seleta, and Pineapple orange
79.12 million boxes of Pera Rio
107.91 million boxes of Valencia and Valencia Folha Murcha oranges
33.59 million boxes of Natal orange
Out of the total orange crop, approximately 16.02 million boxes were produced in West Minas Gerais. Brazil has seen some losses this year due to adverse weather. More than the fruit drop, it was the fruit borer and fruit flies that inflicted severe damage. This year these pests have more than doubled in comparison to the other crops. The higher proportion of fruit from the third and fourth blooms, the fruits hanging on the trees for a longer time and delayed harvest have been conducive to the life cycle of these pests. The São Paulo production for the 2019-20 season is anticipated to be as much as 40% higher than the last crop due to the increased productivity of the trees.
Fundecitrus published its first crop estimate for the 2019-20 orange crop on May 10th 2019. The crop size forecast is above expectation at 389 million boxes signalling an increase of around 36 percent from 2018-19 crop.
The prices for orange are still soft. There are no sharp fluctuations in demand but several buyers are holding out in expectation of a further fall in prices. The higher productivity of the trees comes as a reason to cheer since this implies that the unit cost of production is lowered. This year’s new bidding prices are considered to be lower compared to the input expenses. This, of course, curbs the revenue income and is rather demoralising for those who are solely dependent on sales in the spot market. As far as the fruit volumes go, most of the available stock is traded through previous contracts or already negotiated for in late 2018. But, there is hope yet for some stock availability from several smaller farmers who have been waiting for prices to be fixed this year in order to sell their fruits.
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