- Orange-juice futures climb to highest since March 2012
- Falling production in Brazil, Florida reduces world inventory
Shrinking citrus crops in Brazil and Florida are driving up prices for orange juice and signaling higher costs for mixing up mimosas, the champagne cocktail.
Orange-juice futures jumped to a four-year high Thursday in New York. Brazil’s 2016-17 production of the fruit will fall 14 percent from a year earlier, while Florida will collect the smallest crop since 1964 this season, U.S. Department of Agriculture data show.
The citrus-greening disease has plagued groves in both growing regions, the world’s top orange-juice producers. Adverse weather has added to the crop woes, while recent gains for Brazil’s currency are discouraging farmers to sell to foreign buyers. Even though demand for the juice has waned, the supply problems mean that U.S. and global stockpiles are declining.
Orange juice for September delivery rose 1.5 percent to settle at $1.772 a pound Thursday on ICE Futures U.S. in New York. Prices earlier touched $1.80, the highest since March 2012. The commodity has jumped 20 percent this quarter, a third straight gain.
As inventories stay low, the threat of Florida storms during the Atlantic hurricane season, which lasts through November, will keep prices supported over the next few months, Judy Ganes-Chase, president of J. Ganes Consulting in Panama City, Panama, said in an e-mail.
The citrus-greening disease makes fruit shrivel and drop prematurely. Brazilian buyers are paying as much as 29 percent more per box of oranges than a benchmark index calculated by the University of Sao Paulo to guarantee supply, Mauricio Lemos Mendes, partner at consulting firm Agriplanning in Sao Paulo, said Wednesday.
In the U.S., retail prices for frozen orange-juice concentrate are at the highest in records that go back to 1980.