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Fruit Juice Matters

06/09/2016 18:15:25
Tropicanas bold shift to PET

21/08/2012 11:23:00
Shrinkage in the supply

27/09/2010 15:26:00
Changes Boost Consecitrus

27/08/2010 11:53:00
* Laranja madura

11/09/2009 09:31:00
Closing data for the 2015/2016 season



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COMMITMENT TO TRANSPARENCY

SÃO PAULO, MAY 16, 2016

This document is divided into two parts. The first presents the latest information on volumes of fruit processed, juice production and the overall calculation of supply, demand and ending inventory of orange juice in the 2015/2016 season.

 The second part provides detailed information related to Fundecitrus orange crop estimate for the State of Sao Paulo and Minas Gerais Triangle on the 2016/17 season.

PART I

Closing data for the 2015/2016 season

                 

B

ased on an individual and confidential data compilation done by independent auditor, the Brazilian Association of Citrus Exporters,  CitrusBR, provides today final estimated data concerning total oranges processed, total juice produced and weighted average juice yields in the State of São Paulo on the 2015/16 season.

In total CitrusBR members have processed 240,432,000 boxes of oranges of 40.8 kg in the 2015/16 season, producing a total of 795,463 tons of FCOJ 66º Brix Equivalent which implied on a weighted average juice yield on fruit of 302.2 orange boxes of 40.8kg required to produce 1 metric ton of FCOJ Equivalent 66º Brix.

For all other fruit processors not members of CitrusBR, we estimate their production to be approximately 70,000 tons of FCOJ equivalent. Considering the same juice yield on fruit as of those obtained by CitrusBr members they would have processed 21,154,000 boxes of oranges, which brings the total industry estimated orange processed in the 2015/16 season to 261,586,000 boxes of oranges of 40.8 kg.


Fresh fruit consumption

                 

B

ased on Fundecitrus latest crop forecast up-date of total production of  300,65 million boxes of oranges in the State of São Paulo and Minas Gerais Triangle and considering a total of 261.5 million boxes of oranges processed by the entire industry, we estimate that the total consumption of fresh oranges by the domestic and export markets in the season 2015/16 was of 39 million boxes of 40.8 kg.

Negative impact or severely reduced juice yield on fruit in the 2015/2016 season

                 

T

he juice yield on fruit of 302.2 boxes per metric ton of FCOJ was the worst average ever recorded by the industry. It was 25.7% lower than the 240.5 boxes experienced in the 2014/2015 season. The lower juice yield is the result of the above average rainfalls caused by the El Niño during peak harvesting season. As a result, not only juice content in the fruits has significantly dropped, but average brix of fruits processed have also fallen from 12°Brix in 2014/2015 to 10.2°Brix in 2015/16 season. Consequently, this situation created enormous difficulty for production of Not-From-Concentrated Orange Juice.

In addition, the substantial fall in the juice yield on fruit has prevented the total industry from producing 221,877 tons of FCOJ, or, 323 million pounds solids, for the same amount of fruit received from its suppliers.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

HISTORICAL DATA OF FRUIT PROCESSING YIELDS OBTAINED BY CITRUSBR MEMBERS

FOR PRODUCTION OF ORANGE JUICE (INCLUDED PULP/CORE-WASH, EXCLUDED FROZEN CELLS)

Season

40.8 kg Boxes

Variance

Season

40.8 kg Boxes

Variance

Per Ton of FCOJ

To Previous

Per Ton of FCOJ

To Previous

66 Brix Equiv.

Season

66 Brix Equiv.

Season

2000/01

246.87

n/d

2008/09

252.88

-10.7%

2001/02

236.52

4.2%

2009/10

262.52

-3.8%

2002/03

224.85

4.9%

2010/11

240.58

8.4%

2003/04

226.64

-0.8%

2011/12

265.36

-10.3%

2004/05

244.19

-7.7%

2012/13

263.54

0.7%

2005/06

226.42

7.3%

2013/14

282.00

-7.0%

2006/07

232.69

-2.8%

2014/15

240.50

14.7%

2007/08

228.49

1.8%

2015/16

302.25

-25.7%

Considering the average daily closing of ICE in between July 2015 and April 2016 with US$1.3085 per pound solid (US$1.903,87 per metric ton) or US$1.0227 per pound solid (US$1.487,87 per metric ton) NET of US Import Duty, we estimate that the total negative financial impact that the entire processing industry has suffered  reached US$ 330.6 millions or R$ 1.1 billion.

Supply, Demand and End-of-Season Inventory of the 2015/2016 season

                 

T

he table below outlines our latest estimates of Production, Supply, Demand & Global Ending Inventory of Brazilian Orange Juice on Hands of our members with resulting ending inventory on June 30th 2016 of 332,856 tons of FCOJ Equivalent, or 40 thousand tons in addition to our previous forecast for the same day.


For comparison purposes, the table below shows inventory history data:


PART II

2016/2017 Crop Estimate announced by Fundecitrus – PES Project

                 

O

n May 10, 2016, the Fundecitrus announced the results of the Projeto Estimativa de Safra (Crop Estimate Project - PES) with total number of orange bearing trees, average productivity forecasted per bearing tree and estimated total orange production in the state of São Paulo and Minas Gerais Triangle Citrus Belt for the 2016/17 Season.

Fundecitrus is forecasting a sharp reduction of 18.3% in the total 2016/17 crop size as compared to the previous one. The table below explains how the multiple components of the crop forecast have all together contributed to a reduction in production from 300.6 to 240.5 million boxes of oranges.


1 The calculation considers the total number of trees of the block, that is, bearing and nonbearing trees (2014 or 2015 resets).
2 Weighted average per stratum area.
3 V.Folha Murcha – Valencia Folha Murcha. 

For clarification purposes, the chart below shows the variation of fruits setting per tree in the 12 regions resulted from the 2016/2017 tree stripping as compared to the 2015/16 one.

                 

T

he decrease in the fruit setting, meaning the number of fruits with chances of reaching the harvesting point, happened in almost all regions of the citrus belt with a higher or lower intensity, due to extremely hot weather throughout the fruit-setting period. In some regions, however - such as Matão and Itapetininga - a higher quantity of fruits per bearing tree was stripped, when compared to previous season.

Variation of number of fruits per stripped tree between crop forecasts 2015/2016 and 2016/2017


Production History in the state of São Paulo and the Minas Gerais Triangle Citrus Belt


Source: Fundecitrus & CitrusBR

Estimated Industrial Processing, Industrial yield and final inventory estimates for the 2016/17 season.

                 

F

ollowing its commitment to transparency and disclosure to markets, CitrusBR releases its next statement late July or early August 2016 as soon as final audits of ending inventory are conducted on June 30th 2016, when we will be in better condition to estimate volume of fruit processing, juice yield on fruit, orange juice production, exports and expected carry-overs by June 30th, 2017.

Ibiapaba Netto

Executive Director