Brazil Juice Makers to Scrap Fungicide Faster After Losses

Orange-juice producers in Brazil, the world’s largest exporter, will accelerate efforts to phase out the use of a fungicide banned in the U.S. after losing about $50 million from rejected shipments this year.

The use of carbendazim, which has been banned in U.S. groves, will be phased out in six to eight months in Brazil, less than the 18 months previously expected, said Christian Lohbauer, head of the country’s orange-juice exporters association CitrusBr. Juice processors will also export more non-concentrate juice after the U.S. Food and Drug Administration declined Brazil’s request to raise accepted levels of the fungicide in concentrate, he said.

The U.S. started screening orange-juice imports this year after the Coca Cola Co., owner of the Minute Maid brand, reported traces of carbendazim in Brazilian shipments. Juice is shipped as concentrate from the South American country to reduce costs by trimming cargo volumes and weight. The process to make juice concentrate increases the concentration of carbendazim, Lohbauer said.

“If they won’t raise the permitted levels for concentrate, we will export more of non-concentrate,” Lohbauer said by telephone from Sao Paulo.

The U.S. Food and Drug Administration limits carbendazim to less than 10 parts per billion in all imports. Brazilian producers asked the FDA to raise the limit to 60 parts per billion for concentrates.

Rejected Shipments

The U.S. has rejected about 25,000 metric tons of juice from Brazil this year, causing losses because exporters will resell the cargoes at lower prices and will have higher freight costs, Lohbauer said.

Orange juice producers Sucocitrico Cutrale Ltda, Louis Dreyfus & Cie SA, Citrovita Agro Industrial Ltda and Citrosuco, which own plants in Brazil and in the U.S., will also boost output of juice concentrate in the U.S. to supply the local market and meet supply contracts, he said.

To contact the reporter on this story: Lucia Kassai in Sao Paulo at lkassai@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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