Brazil. Citrus Annual. Dec 2014 Jan. 13, 2015

Report Highlights: 

Brazilian orange crop for 2014/15 is projected at 400 million 40.8-kg boxes, down 13 million boxes from the previous year. Total frozen concentrate orange juice (FCOJ) production for 2014/15 is forecast at about1 million metric tons, a 10 percent decrease compared to previous season. FCOJ ending stocks for 2014/15 are projected at 107,000 metric tons, down 62 percent from 2013/14 due to expected reduced availability of fruit for processing.

Oranges, Fresh

Production 

PS&D Tables 

The following tables provide revised data for Sao Paulo and total Brazilian fresh orange production, supply and demand (PS&D) for Brazilian (BR) marketing years (MY) 2013/14, 2014/15, (July-June) and the initial forecast for MY 2015/16, which are equivalent to U.S. MY 2012/13, 2013/14, 2014/15, respectively. 

Brazil: Fresh Oranges PS&D (Jul-Jun) (1,000 ha, million trees & million 40.8 kg boxes)

• There is a one year lag between the Brazilian (BR) marketing year (MY) and the U.S. marketing year (MY). For example, BR MY 2015/2016 is equivalent to U.S. MY 2014/2015. As such and to ensure data continuity, the current Brazilian MY 2015/16 will be referred to as U.S. MY 2014/15 throughout this report 

General 

Total Brazilian orange crop for MY 2014/15 (July/June) is projected at 400 Million 40.8-kg boxes (MBx), a 13 MBx drop relative to the current crop (MY 2013/14), assuming that normal weather conditions prevail as of December 2014 to support fruit setting and development. The commercial area in the state of Sao Paulo and the western part of Minas Gerais should account for 285 MBx. This figure takes into account the four major varieties of citrus used for processing orange juice (Hamlin, Pera Rio, Natal and Valencia) plus a limited volume of other citrus varieties such as Lima, Bahia, Murcorte and Poncan which are used for processing juice. Production from other states is projected at 115 MBx. It is still early to project orange production for MY 2014/15. More accurate numbers will be available during the first quarter of 2015. 

The Brazilian orange crop estimate for MY 2013/14 is estimated at 413 MBx, down 12 MBx compared to the previous estimate (425 MBx), due to a decrease in the production volume mainly from the commercial area in the state of Sao Paulo and the western part of Minas Gerais (300 MBX). According to updated information from the industry the dry weather that has prevailed in the growing areas has affected the size of the fruit, thus reducing total production. 

The National Supply Company (CONAB) has not announced any orange crop survey for the 2014/15 crop (BR MY 2014/15). The Sao Paulo State Institute of Agricultural Economics (IEA) released the fourth orange crop survey for the 2014/15 crop (BR MY 2014/15). The Sao Paulo state crop, including both commercial and non-commercial areas, is estimated at 292.9 MBx, up 2 percent from the previous season (286.3 MBx). Note that IEA take into account the entire state of Sao Paulo and all varieties of oranges, while ATO estimates follow the citrus industry methodology which includes the commercial area of the state plus the western part of Minas Gerais and the four major citrus varieties for juice processing. IEA report that the state of Sao Paulo orange tree inventory is estimated at 186.9 million trees (165.8 million bearing trees and 21.1 million non-bearing trees). 

Area, Tree Inventory and Yields 

The Brazilian agricultural yield for MY 2014/15 is forecast at 1.95 boxes/tree, a 3 percent decrease compared to the current season (2.01 boxes/tree), assuming normal weather conditions as of December 2014. 

Total orange area for MY 2014/15 is projected stable at at 715,000 hectares (ha). Total Brazilian tree inventory for MY 2014/15 is projected unchanged at 234 million trees. Sao Paulo is the only state that compiles data on tree planted and tree inventory. ATO/Sao Paulo estimates stable area and tree population for “Other” states based on uniform production figures provided by IBGE.

Producers’ Prices 

The Orange Index price series is published by the University of Sao Paulo’s College of Agriculture “Luiz de Queiroz” (ESALQ) for both the domestic fresh market and product delivered to orange juice processing plants in the state of Sao Paulo. Prices for the fresh market are for fruit on the tree.

A significant share of the producers does not have long term contracts with the orange juice (OJ) processors. Post contacts report that the price per box for those with contracts range from R$ 11 to 12 per box and in some cases, the final price includes a premium depending on the price of the orange juice overseas. Average orange prices for growers without long term contracts have ranged between R$ 8 and 10.50 per box during the current crop. 

In October 2014, the Brazilian Government reenacted the Equalization Premium Paid to the Producer (PEPRO) Program for citrus growers. PEPRO is a premium granted to the citrus growers which sells its products at public auction, where the government pays the difference between the minimum reference price set at R$ 11.45/box of orange and the prevailing market price (the price paid by the orange juice processors). A total of R$ 50 milllion is available for the 2014/15 crop and each individual grower can sell up to 20,000 boxes of orange through the programs. 

Consumption 

Total Brazilian orange consumption for MY 2014/15 is forecast at 135.5 MBx, similar to MY 2013/14 (133.5 MBx). These figures include actual domestic consumption plus losses from natural drop, harvesting, transportation and packing. 

Fruit delivered to processors for “not from concentrated (NFC)” orange production for the domestic market is also included in these figures. There are no official statistics on domestic NFC consumption, however the citrus industry estimates between 70,000 and 100,000 mt of orange juice consumed as NFC which represents from 3 to 4.5 MBx of oranges for processing. 

Domestic consumption estimates are calculated as the difference between production estimates and the volume of oranges delivered to processors for FCOJ and NFC produced for exports. 

Trade 

Total fresh orange exports for MY 2014/15 are forecast at 0.5 MBx, similar to the current season. The majority of exports occur during the harvest of the commercial crop (June-December). The table below shows official fresh orange exports (NCM 0805.10.00) by country of destination, for BR MY 2013/14 and BR MY 2014/15 (July-October), according to SECEX. 

Brazilian Fresh Orange Exports (MT and US$ 1,000 FOB)

Orange Juice

Production 

PS&D Tables 

The following tables provide revised data for Sao Paulo and total Brazilian orange juice production, supply and demand (PS&D) for Brazilian (BR) marketing years (MY) 2013/14, 2014/15, (July-June) and the initial forecast for MY 2015/16, which are equivalent to U.S. MY 2012/13, 2013/14, 2014/15, respectively. 

The tables include NFC production for exports converted to Frozen Concentrated Orange Juice (FCOJ), 65 Brix equivalent, using the following conversion factor: 1 metric ton of FCOJ 65 Brix equals 5.6 metric tons of NFC 11.6 Brix.

General 

ATO/Sao Paulo projects total Brazilian FCOJ 65 Brix equivalent production for MY 2014/15 at 1.01 million metric tons (mmt), a 10 percent drop compared to MY 2013/14, due to lower expected fruit availability for crushing. The Sao Paulo industry is expected to process 240 MBx of oranges for orange juice production (186 MBx and 54 MBx for FCOJ and NFC production, respectively), accounting for 920,000 mmt of juice (710,000 mt and 210,000 metric tons of FCOJ and NFC, respectively). Other producing states should deliver 24 MBx for processing. 

Total Brazilian FCOJ 65 Brix equivalent production for MY 2013/14 is estimated at 1.12 mmt, up 14 percent relative to the previous MY, due to higher availability of fruit for processing and good industrial yields. The industrial yield for MY 2014/15 (246 box of orange per 1 ton of FCOJ 65 Brix) has been significantly better than the previous crop (280 box of orange per 1 ton of FCOJ 65 Brix) due to the dry weather during the harvest season. The Sao Paulo industry should account for 255 MBx for crushing, whereas other states should contribute 24MBx. The crushing season is expected to end in January 2015. 

Orange juice figures include NFC production for exports converted to FCOJ 65 Brix equivalent. There is no official estimate for NFC supply and demand in Brazil. 

Consumption 

FCOJ domestic consumption for MY 2014/15 is forecast at 47,000 mt, 65 Brix, up 2,000 mt from MY 2013/14, due to steady growing trend in consumption of ready to go orange juice and nectars. 

Trade 

Total Brazilian FCOJ 65 Brix equivalent exports for MY 2014/15 are forecast at 1.14 mmt, slightly up compared to MY 2013/14 (1.125 mmt), assuming stable FCOJ exports and increased NFC exports to the United States and western Europe. The Sao Paulo industry should contribute 1.1 mmt, 65 Brix equivalent. 

The tables below show official orange juice exports (NCM 2009.11.00, NCM 2009.12.00 and 2009.19.00) by country of destination for BR MY 2013/14 and BR MY 2014/15 (July-October), according to SECEX. The “Others” category includes both FCOJ and NFC exports. Post considers the average monthly price by country of destination for the “Others” category as a criterion to distinguish between FCOJ and NFC exports.

Stocks 

Ending stocks for MY 2014/15 are projected at 107,000 mt, 65 Brix, down 177,000 mt from MY 2013/14 (288,000 mt), due to projected reduced availability of fruit for processing and expected stable export volumes. Stock figures include only stocks in the storage tanks of orange juice facilities (processing plants, port terminals, etc) in Brazil. They do not include stocks owned by Brazilian companies abroad, e.g., in transit and port terminals in the U.S., Europe and Japan. 

According to the Brazilian Association of Citrus Exporters (CitrusBR), global Brazilian orange juice inventories were 534,000 metric tons (66 Brix) in June 30, 2014. CitrusBr projects global orange juice inventories on June 30, 2015 at 364,000 mt. CitrusBR global inventories include orange juice in storage tanks at processing plants and port terminals in Brazil; and stocks abroad (vessels and port facilities worldwide)