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
Florida is the largest orange producing state in the United States, and ranks third in the world behind Brazil and China. In the USDA May 2018 report, Florida’s orange production forecast was reduced down further to 44.95 million boxes in 017/18. What is worrying is the fact that this is Florida’s nadir, the lowest orange crop production in more than 75 years. This forecast represents approximately 35% less fruit compared to last season’s final production (69.0 million boxes). The total volume is comprised of 18.95 million boxes of early, midseason and navel varieties and 26.0 million boxes of Valencia oranges. Approximately 95% of oranges grown in Florida are processed for juice. Since the discovery of the fatal citrus greening as far back as 2005, the Florida orange crop has plummeted by over 70% from 242 million boxes in the season of 2003-04.
In contrast, California estimates peg annual orange production at a respectable figure of 44.5 million boxes for 2017/18, almost at par with Florida. A significant factor that contributed to this stable production is that California has so far evaded citrus greening disease. Annual Texan orange production has been moderately constant at around 2 million boxes.
Florida’s numbers pale in comparison to the new bumper crop forecast from Brazil. The South American nation is now processing a lot more oranges than Florida. Offering 398 million boxes against Florida’s 45 million boxes of oranges, Brazil has rewritten history and set a new paradigm. The substantially reduced orange crop will reduce the amount of US orange oil produced. However, the market for this product is now dominated by the positive developments in Brazil’s orange output and processing industry.
To conclude, the Florida industry is far from optimistic but nevertheless continues to explore ways of increasing production. The biological phenomenon, alternating bloom, whereby a heavy yield in one year is following by lower yields the next, could be the answer to an increased growth in Florida production in 2019; which in turn could lead to downward pressure on orange oil prices.
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