Australian juice processors face higher orange prices

By Dominique Patton

- Last updated on GMT

Related tags: Juice, Orange, Citrus

Australian orange growers have warned that supplies of the fruit
will be tight this year as frost followed by a severe drought has
caused a sharp drop in the Valencia orange crop.

Prices are expected to more than double, squeezing margins at juice processors. The 2006-07 Valencia harvest will only reach 207,000 tonnes, a 26 per cent decrease on 2005/06 figures, and only marginally bigger than the 2003/04 season, which was the lowest crop in 20 years, said the Australian Citrus Growers (ACG) association in a statement yesterday. The smaller Australian crop comes at a time of global shortages, with weather conditions also affecting orange harvests in Florida and Brazil. Prices for frozen concentrate orange juice from Brazil - which supplies almost half of the world's juice market - are already at their highest since 1992. But the reduced Australian crop is of particular threat to fresh squeezed orange juice producers, who are restricted in the type of oranges that can be used for squeezing. Australian freshly squeezed juicers must use fresh fruit supplied by the domestic market. The ACG is encouraging its 2500 growers to save supplies for the fresh juice and export markets, "both markets we don't want to lose,"​ director Kevin Cock told 30 per cent of Australia's crop is typically exported, while the rest is used for juice. "The market for freshly squeezed juice had been leveling out but it has now started to increase again. We want to continue this growth for high quality juice,"​ Cock said. He added that the supply shortage would be felt "across the board"​, with producers of all juice types feeling the pinch. The ACG estimates world parity prices for Australian Valencia oranges to be $180 to $200 per tonne, a stark contrast to the $80 per tonne from previous seasons. However Cock said it is not clear whether these prices will be felt by consumers. "When only $80 per tonne was being paid on the farm, we didn't see the consumer price come down. So I don't know if prices are now going to go up. The supermarkets have control over this,"​ he said. But the ACG has called on its growers to avoid speculation of higher spot prices by liaising closely with packers and/or processors, and supporting long-term contracts for processing fruit. It also wants consumers to support Australian farmers by purchasing high quality, fresh Australian orange juice. The country could however be forced Australia to import more oranges than usual this year.

Related topics: Markets, Oceania, Supply chain, Beverages

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