The price of %OrangeJuice is trading at an all-time high as drought conditions and pest infestations destroy crops stretching from Florida to Brazil.
Futures prices for concentrated orange juice traded on New York’s Intercontinental Exchange have been as high as $5.50 U.S. per pound in the last 24 hours, the highest level on record.
The sharp increase in price comes as severe drought conditions and widespread pest infestations impact Brazil’s orange crop.
Brazil is the world’s largest exporter of oranges and accounts for 70% of the world’s orange juice.
At the same time, global orange supplies have been declining for months as orange groves in Florida grapple with pest infestations, further hurting this year’s crop.
The current situation has led to a threefold increase in the price of concentrated orange juice from two years ago, placing significant financial strain on beverage companies that are struggling with escalating costs.
The current situation looks likely to get worse before it gets better. Analysts are now forecasting that Brazil will produce its smallest orange crop in 35 years this season.
Orange production in Brazil is already down 25% from last year. Brazil’s government says it is experiencing the worst drought in 50 years, which has left citrus-growing regions of the country without any rain during the past four months.
The drought, combined with the spread of pests and a citrus greening disease in many areas, including Florida, is severely pressuring the market for concentrated orange juice.
Some analysts are calling the current situation the “perfect storm” for the orange juice market.
Citrus greening disease, which began spreading throughout Florida 20 years ago, is now impacting Brazil.
The disease, transmitted by insects, causes the fruit to become bitter and eventually destroys orange trees.
In Brazil, 38% of orange trees are reported to be showing symptoms of the disease. Citrus greening disease is leading to reduced yields and lower juice quality among growers.
