Americans are drinking less orange juice and sending prices to the longest slump in eight months even as disease threatens groves in Florida.
In the four weeks ended June 7, U.S. retailers sold 36.99 million gallons, down 6.9 percent from a year earlier, the Florida Department of Citrus said June 23, citing Nielsen Co. data. Futures fell for the sixth straight session.
Prices are poised for the first quarterly slump in a year amid concern that demand is falling faster than supplies in the U.S., the world’s biggest consumer. While growers in Florida are set to collect the smallest harvest since 1985, American demand has dropped 5.5 percent since Oct. 1, compared with a year earlier, the Citrus Department data show.
“The retail sales were terrible,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “The damage to this year’s crop was already priced in, and we won’t have any more bullish news until the new harvest starts by October, or if we have a weather threat.”
Orange juice for September delivery fell 1.8 percent to close at $1.514 a pound at 1:41 p.m. on ICE Futures in New York. Earlier, the price reached $1.493, the lowest for a most-active contract since March 27. The slump was the longest since Oct. 22.
The slide increases the chances of lower costs for Coca Cola Co., the maker of Minute Maid brands, and Pepsi Co., which sells Tropicana juices.
In the 12 months ending Sept. 30, Americans will drink 701,000 metric tons of the juice, the least since 1986, the U.S. Department of Agriculture estimates. Per-capita consumption in the $1.45 billion domestic market dropped to 35.3 liters (9.3 gallons) in 2013 from 46.2 liters a decade earlier, according to Ross Colbert, a global beverage strategist for Rabobank International, who cited data from Euromonitor International.
Demand has dropped amid “the perception that it has too much sugar, and that it’s way too expensive compared with other alternatives,” Colbert said in a telephone interview from New York. “Consumers continue to migrate to other lower-calorie options, like bottled and flavored water.”
Brazil is the world’s biggest citrus grower followed by Florida.