Brazil. Citrus Annual. Dec 2013 Jan. 2, 2014
Brazilian orange crop for U.S. marketing year 2013/14 (July/June)* is projected at 435 million 40.8-kg boxes (MBx), up 34 MBx from U.S. MY 2012/13, assuming regular weather conditions prevail during fruit setting and development. Sao Paulo and western Minas Gerais commercial areas could produce 320 MBx. Total frozen concentrate orange juice (FCOJ) production (65 Brix equivalent) for U.S. MY 2013/14 is projected stable at 1.22 mmt (65 Brix). FCOJ ending stocks for U.S. MY 2013/14 projected at 93,000 mt, 65 Brix, down 112,000 mt from MY 2012/13.
Total Brazilian orange crop for MY 2013/14 (July/June) is forecast at 435 Millon 40.8-kg boxes (MBx), an 8 percent increase compared to the current crop (MY 2012/13), assuming that good weather conditions prevail as of December 2013 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 320 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 2013/14. More accurate numbers will be available during the first quarter of 2014.
The Brazilian orange crop estimate for MY 2012/13 is estimated at 401 MBx, down 6 MBx compared to the previous estimate (407 MBx), due to a decrease in the production volume from states other than Sao Paulo (111 MBX), according to updated information provided by the Brazilian Geography and Statistics Institute (IBGE).
In August 2013, the National Supply Company (CONAB) and the Sao Paulo State Institute of Agricultural Economics (IEA) released the second orange crop survey for the 2013/14 crop (BR MY 2013/14). The Sao Paulo state crop, including both commercial and non-commercial areas, is estimated at 311.5 MBx. Note that CONAB and 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. CONAB and IEA report that the state of Sao Paulo orange tree inventory is estimated at 201 million trees (181.7 million bearing trees and 19.3 million non-bearing trees).
CONAB has also released the second orange crop survey for the 2013/14 crop in the commercial area of the state of Minas Gerais (the “Triangulo Mineiro”). According to CONAB, the aforementioned region represents 70 percent of the Minas Gerais state production. The crop is estimated at 10.9 MBx. This figure includes 10.7 MBx in commercial areas, and orange losses plus production from non-commercial areas in the amount of 232,800 Bx.
Area, Tree Inventory and Yields
The Brazilian agricultural yield for MY 2013/14 is forecast at 2.1 boxes/tree, a 12 percent increase compared to the current season (1.87 boxes/tree), assuming normal weather conditions as of December 2013.
Total orange area for MY 2013/14 is forecast at 715,000 hectares (ha), down 25,000 ha compared to last season, due to higher number of trees per hectare and substitution of citrus groves by soybean, sugarcane and pasture in the Sao Paulo and Minas Gerais commercial areas. Total Brazilian tree inventory for MY 2013/14 is projected at 236 million trees, down 7 million trees compared to the previous season. Sao Paulo is the only state that compiles data on tree planted and tree inventory. ATO/Sao Paulo estimates report stable area and tree population for “Other” states based on uniform production figures provided by IBGE.
The Orange Index price series is published by the University of Sao Paulo’s College of Agriculture “Luiz de Queiroz” (ESALQ) for both the fresh domestic market and product delivered to orange juice processing plants in the state of Sao Paulo. Both series track orange prices from September 1994. 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 US$ 2.75 to US$ 5.29 per box and in some cases, the final price includes a premium depending on the price of the orange juice overseas.
In late October, the Brazilian Government set the minimum price for oranges at R$ 10.10 per box. This price will be used as reference if any measure is taken by GOB to support the sector like the Subsidy Auction (PEP) and Equalization Premium Paid to the Producer (PEPRO) Programs. The GOB has not announced any measure to support citrus growers.
Total Brazilian orange consumption for MY 2013/14 is forecast at 134.5 MBx, similar to MY 2012/13 (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. 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.
Total fresh orange exports for MY 2013/14 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).
ATO/Sao Paulo projects total Brazilian FCOJ 65 Brix equivalent production for MY 2013/14 at 1.16 million metric tons (mmt), an 18 percent increase compared to MY 2012/13, due to higher expected fruit availability for crushing. The Sao Paulo industry is expected to process 280 MBx of oranges for orange juice production (215 MBx and 65 MBx for FCOJ and NFC production, respectively), accounting for 1.08 mmt of juice (840,000 mt and 240,000 metric tons of FCOJ and NFC, respectively). Other producing states should deliver 20 MBx for processing.
Total Brazilian FCOJ 65 Brix equivalent production for MY 2012/13 is estimated at 981,000 mt, a 23 percent drop relative to the previous crop, due to lower availability of fruit for processing and low industrial yields. The Sao Paulo industry should account for 247 MBx for crushing, whereas other states should contribute 20MBx. The crushing season is expected to end in February 2013.
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.
FCOJ domestic consumption for MY 2013/14 is forecast at 52,000 mt, 65 Brix, up 2,000 mt from MY 2012/13, due to steady growing trend in consumption of ready to go orange juice and nectars.
Total Brazilian FCOJ 65 Brix equivalent exports for MY 2013/14 are forecast at 1.22 mmt, slightly up compared to MY 2012/13 (1.2 mmt), assuming stable exports to western European countries and increased exports to the United States which should offset a drop in exports to emerging markets such as China. The Sao Paulo industry should contribute 1.08 mmt, 65 Brix equivalent.
Ending stocks for MY 2013/14 are projected at 93,000 mt, 65 Brix, down 112,000 mt from MY 2012/13 (205,000 mt). Ending stocks for MY 2011/12 were revised to 474,000 mt based on updated production, supply and demand figures. 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 766,000 metric tons (66o Brix) in June 30, 2013. CitrusBr projects global orange juice inventories in June 30, 2014 at 476,600 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)