Brazilian orange juice
Opportunities and challenges in the global market
Title
Author
Contributors
Date
Brazilian orange juice
Opportunities and challenges in the global market
Mariana Gonzalez
[email protected]
Tiemen Leijh
Stephen Rannekleiv
October 2007
Copyright
No part of this publication may be reproduced in any form by print, photo print,
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Disclaimer
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any liability whatsoever for any direct or consequential loss howsoever arising from
any use of this document or its contents or otherwise arising in connection herewith.
Contact address
for this publication
Rabobank International
F&A Research and Advisory
E-mail: [email protected]
Website: www.rabobank.com/far
© Rabobank, 2007
Table of contents
1
1.1
1.2
1.3
2
2.1
2.2
2.3
2.4
2.5
2.6
3
3.1
3.2
3.3
3.4
Glossary
2
Introduction
3
Opportunities in the global market
4
Mature markets
Developing markets
Summary of world demand and trends
7
12
15
Global supply
17
Brazil
U.S.
Mexico
China
Others
Outlook for global supply
18
22
26
27
28
28
Challenges faced by Brazil
29
Competition for land
Grower-processor relationship
Citrus plant diseases
Demand-side challenges
30
31
33
34
4
Analysis of key success factors, opportunities and threats
36
5
Outlook
37
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Glossary
Glossary of terms
Box
Brix
|
Unit of measure used in the citrus industry, indicating the weight of the fruit. One box of oranges is equal to
40.8 kilograms, or 90 pounds.
Unit of measure which refers to the percentage of soluble solids in orange juice. One degree brix (1° brix) is
equal to 1% of soluble solids.
Single strength orange juice has 11° to 12° brix.
FCOJ from Brazil has 64° to 66° brix.
FCOJ
Frozen concentrated orange juice.
Juice drinks
Juice drinks have up to 24% juice content.
Nectars
Nectars have 25% to 99% juice content.
NFCOJ
Not from concentrate orange juice.
Ratio
Relation between brix and acidity.
Recon
A form of single strength orange juice, which has been reconstituted from FCOJ, sold as ready to drink product
in either chilled or shelf-stable format.
Single strength juice
Orange juice at 11° to 12° brix, which is the concentration of orange juice when extracted from oranges and
the concentration of ready to drink retail orange juice products.
SSE
Single strength equivalent.
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Introduction
Stakeholders in the orange juice sector in Brazil are currently face to face with a
unique opportunity: growing demand for orange juice in the international market
and a structural reduction of the U.S. production, from which there is little chance
of recovery. The high incidence of citrus plant diseases, triggered by hurricanes,
which increases production costs, coupled with rapid real estate encroachment in
Florida, the main orange growing region in the U.S., are responsible for this fate.
Moreover, there are few other potential contenders to fill the gap that is emerging
as a result of declining output from the world’s largest orange juice consumer.
The combined effect of these factors has resulted in significantly higher prices as
well as a strategic opportunity for Brazil to further increase its dominance in the
world market. Brazil is by far the largest orange producer and accounts for roughly
80% of global orange juice trade (Figure 0.1).
Figure 0.1
Brazil’s share in global orange juice exports (2006)
Other 19%
Brazil 81%
Source: USDA, 2007
Nonetheless, challenges also abound. In recent years, world demand has slowed
down, led by strong competition from a growing array of other beverages, as well
as the increase in orange juice prices and declining stocks.
The aim of this report is to address the changing dynamics of the global orange
juice market, identifying issues that impact the sector’s major stakeholders, namely
orange growers, processors and beverage companies, and provide insight into the
challenges and opportunities that lie ahead.
This report has been published in line with Rabobank’s long-term commitment
to the international food and agribusiness. It is one of a series of publications
undertaken by the global department of Food & Agribusiness Research and Advisory.
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