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 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.
USDA PRODUCTION AND PROCESSING HISTORY AND FORECAST FOR BRAZIL ORANGE
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