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Writer's pictureAvi Shaposhnik

Frozen Orange Juice Futures Surge Amid Supply Shocks in U.S. and Brazil

Frozen concentrated orange juice futures on the Intercontinental Exchange are approaching new record highs, driven by significant supply disruptions in Florida and Brazil. A combination of extreme weather events and agricultural disease has worsened the outlook for the citrus industry, threatening to push prices even higher.


  • Florida’s orange harvest may be the worst since the 1920s, with over three million boxes lost after Hurricane Milton.

  • OJ futures hit $5 per pound, up 433% from their COVID-19 low, as U.S. production nears a century-low.

  • Brazil’s OJ exports are under pressure from the worst drought in 50 years, further disrupting global supply.


Oranges
Oranges

The latest survey on Florida's citrus groves revealed widespread destruction caused by Hurricane Milton, with over three million boxes of oranges lost. This disaster could lead to the worst Florida harvest since the 1920s, following previous damages from Hurricanes Ian and Nicole, as well as citrus greening disease. U.S. orange production is now expected to hit its lowest level in more than a century.


OJ futures have surged to $5 per pound, a 433% increase from their pandemic low of $1 per pound. Brazil, which had stepped in to cover falling U.S. production, is also facing severe setbacks, including a historic drought and widespread crop disease. Analysts report that Brazil’s citrus belt is experiencing its driest period in 50 years, further straining global OJ supplies.


U.S. OJ inventories are at their lowest levels since the early 1970s, amplifying supply pressures and driving market volatility. With reduced production from both Florida and Brazil, OJ prices in supermarkets are expected to rise further, adding to inflationary pressures, which spiked in September to their highest rate in 18 months.


Businesses can leverage Hedgify’s expertise to mitigate the risks associated with price surges and volatility in the orange juice market, ensuring stable costs amidst turbulent conditions.


The information provided in this market insight is for general informational purposes and should not be considered financial advice. It is not intended to offer any financial recommendations or endorsements. Any decisions made based on the content are the sole responsibility of the reader.


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