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. Other origins for Orange oil include Brazil, South Africa & Spain.
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.
Bearing acreage of orange in the USA is a particular worry as year on year the output has been declining. In the past 10 years it has fallen from around 770 thousand acres to 600 thousand acres today. Below are Florida's recent fresh fruit outputs, courtesy of the USDA, showing the significance of the decline.
|TYPE / SEASON||2011/12||2012/13||2013/14||2014/15||2015/16*|
|Valencia Type (1,000 boxes)||72,500||66,500||51,300||49,400||33,000|
|Non-Valencia Type (1,000 boxes)||74,200||67,100||53,300||39,500||36,000|
*2015/16 data forecasted by USDA at 9th February 2016
How low can you go Florida? You will be no stranger to bad news emanating from this part of the world, which has been compounded this year by the arrival of Hurricane Irma at the start of the 2017/18 campaign.
Quantifying the local devastation is difficult and the numbers don’t do justice to the real impact for those who have lost the most. The USDA’s forecasts in recent months didn’t seen to quantify the full impact because on one hand it claimed droppage to be 50%, yet production forecasts to be down just 26%. This never added up and it has since revised its forecasts again by reducing them 9% in November and a further 8% in December. Expect even more revisions down in 2018!
In November the total forecast production stood at 50 million boxes and a long way from what we would historically have expected from this region. In fact, the historians would tell us that this is set to be the worse season since the 1946/46 campaign and may even be passed on production by California whose latest estimate stands at 48 million boxes.
When it comes to oil production we’ve probably already resigned ourselves to the reality that Florida isn’t such a global influencer anymore but it certainly does add to the pressure in an already firm market.
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