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 crop estimates can be somewhat confusing because there is a one-year lag between the Brazilian Marketing Year (MY) from July-June, and the US MY, which is used by the USDA. Thus, the current Brazilian MY 2020/2021 is equivalent to U.S. MY 2019/2020. In the data below, the US MY is used.
The USDA predicts the new Brazilian orange crop in 2019/20 will be 370 million boxes (15.1 MMT), a massive 22% decrease as compared to the current crop. This estimate is somewhat below Fundecitrus’s last estimate of 385 million boxes. According to Fundecitrus’s 2019 greening survey some 19% of the commercial area in São Paulo and Minas Gerais is affected by greening, slightly higher than the previous year, although the spread of the disease has been relatively stable in recent years. The decline in ouput is due to climatic factors including warmer than usual temperatures and below-average rainfall after the first two blooms and fruit set in São Paulo State. It is predicted that production in São Paulo state and western Minas Gerais will account for 270 million boxes, while a further 100 million boxes will be from other origins. As a result, the total amount of fruits for processing will fall substantially. It is expected to be at 254 million boxes (10.4 MMT) which is 95 million boxes (3.9 MMT) less than in 2018/2019. According to initial estimates, most of the plants were scheduled to run until the end of February. However, in the wake of the reduced numbers, several of these have stopped production since most of the fruit will be mobilised for fresh consumption and exports. Meanwhile, fresh orange domestic consumption is lowered to 4.7 MMT, the lowest in 4 years. Also, the estimate of the current Brazilian orange crop (2018/2019) has been revised down from 494 to 475 million boxes (i.e. 20.15 MMT to 19.38 MMT). According to the IBGE this was mainly due to below average rainfall during late 2019 resulting in smaller fruit size and above-average fruit drop rates in São Paulo and western Minas Gerais.
Total Brazilian FCOJ 65 Brix equivalent exports for 2019/20 are forecast at 935,000 MT, a drop of 345,000 MT compared with 2018/19 due to expected lower availability of oranges for crushing in the upcoming season. Orange juice exports to the U.S. are likely to drop with the recovery of the orange crop in Florida.
With the decreased crop size and most of the volumes already accounted for, supplies are already dwindling. We expect prices to start inching up this year after historic lows last year.
USDA ORANGE Production and Processing for Selected COUNTRIES (x 1,000 MT)
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