Orange-juice futures jumped to the highest since May 2007 after Florida, the world’s second-biggest citrus grower, declared a state of emergency amid severe cold and the prospects of crop damage.
Governor Charles Crist said “extreme temperatures” threaten the state with a “major disaster.” Some areas may be subject to freezes through Dec. 15, Crist said in a statement on Dec. 10, citing National Weather Service forecasts. Prices jumped as much as 6.2 percent.
“This kind of temperature will freeze the fruit,” said Jimmy Tintle, an analyst at Transworld Futures in Tampa, Florida. “The market will remain bullish until we are able to ascertain the extent of damage.”
Orange juice for January delivery advanced 6.35 cents, or 4 percent, to settle at $1.6695 a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price surged by the exchange limit of 10 cents to $1.706, the highest since May 9, 2007.
The commodity has gained 29 percent this year amid concern that adverse weather would damage Florida’s groves.
The crop is at risk of “light” damage from freezing temperatures tonight, said Jason Nicholls, a senior meteorologist at AccuWeather Inc. Temperatures in central and northern regions may fall to 26 degrees Fahrenheit (minus 3.3 degrees Celsius) to 34 degrees tonight, he said.
“The coldest night is actually tonight,” Nicholls said. The fruit can be damaged when temperatures fall below 28 degrees for several hours, he said.
“If it gets down to 26, it will only be for a few hours,” he said. “Tomorrow, we won’t see much of a problem.”
Florida will produce 143 million boxes of oranges in the harvest that began in October and runs into July, the U.S. Department of Agriculture said on Dec. 10. That was down from an October estimate of 146 million boxes.
Last year, output dropped to 133.6 million boxes, the second-smallest crop in two decades, after a January freeze damaged fruit.
Brazil is the world’s biggest grower.