Disease, drought and alternative fruits: The orange juice industry is in crisis
The orange juice industry is reeling.
Prices of the breakfast staple recently climbed to fresh all-time highs, rattled by a perfect storm of climate-fueled extreme weather, persistent supply constraints and a citrus disease known as greening.
The price rally accelerated sharply late last month, after research center Fundecitrus warned that Brazil, the world's largest producer and exporter of orange juice, was likely on track to register one of its worst orange harvests in more than three decades.
The crisis has even prompted some orange juice manufacturers and blenders to explore whether alternative fruits, such as mandarins, apples and pears, can be used to dilute the drink.
"With no short-term solution in sight and the risk of worsening disease conditions, the situation remains critical," Kees Cools, president of the International Fruit and Vegetable Juice Association (IFU), told CNBC by email.
Frozen concentrated orange juice futures, traded on the Intercontinental Exchange in New York, closed at $4.29 per pound on Monday — nearly double the price registered a year ago.
The benchmark contract has pared gains in recent weeks, falling from an intraday high of nearly $5 per pound on May 28.
Analysts at research group Mintec say that Brazil, which plays a hugely influential role in shaping the orange juice industry, typically produces about 300 million boxes of oranges (each weighing approximately 40.8 kilograms) per cycle. But the combination of extreme weather, such as flooding and drought, and greening has dramatically reduced crop production.
In a report published on May 10, Fundecitrus forecast that Brazil was set to produce 232.4 million boxes of oranges in the 2024 to 2025 season. That represents a 24% decline when