INFORMATION TO THE MARKET
AUDITED INVENTORIES ON JUNE 30, 2018:
A survey conducted by independent auditing firms with each of CitrusBR members and consolidated by external independent auditing firm, showed that global inventories of Brazilian Orange juice converted into Frozen Concentrated Orange Juice Equivalent (FCOJ 66° Brix) on hands of its members on June 30th, 2018, amounted to 342,967 tons, representing an increase of 219,37% when compared to the existing 107,387 tons from the same date in the previous year (June 30th, 2017).
INDUSTRIAL YIELD ON FRUIT ESTIMATED FOR SEASON 2018/19:
A survey also conducted individually and confidentially by an independent auditing firm with CitrusBR members estimated the average industrial yield on fruit for the 2018/2019 season at 258.78 boxes of oranges required to produce 1 metric ton of FCOJ equivalent to 66 ° Brix. The improvement in yield on fruit can be attributed to the 120 days of drought observed in most of the citrus belt.
The table below contains historical data of juice yield on fruit since the 2000/2001 season:
FRUIT PRODUCTION ON 2018/19 SEASON
On May 9TH, 2018, the Fund for Citrus Plant Protection (Fundecitrus) estimated the orange crop at 288.29 million boxes of 40.8 kilos, 30% lower than the 397 million boxes of the previous season. The forecast was released before the aforementioned period of drought, therefore, without capturing possible effects on production. The lack of rain was observed between May, June and July, an important period for fruit development. Early varieties were the most affected, however, even the mid and late varieties should be impacted.
DEMAND PROJECTED IN THE 2018/19 SEASON:
Brazilian exports reported by the Foreign Trade Secretariat (Secex) finished the 2017/2018 season at 1,150,714 tons, 29% higher than the previous 894,669 tons. The Brazilian internal market of orange juice is estimated at around 35,000 tons. Considering that internal and external demand remain stable during the 12 months of this season, it is possible to estimate the total demand for FCOJ 66 Brix Equivalent at around 1,185,714 tons.
SUPPLY AND DEMAND/ INVENTORIES FOR THE NEXT SEASON
The improvement in juice yield on fruit can compensate for part of the crop decrease, but more accurate data will be obtained with the crop forecast update, on September 10th. Thus, it is reasonable to estimate that inventories, in the best case scenario, of orange juice FCOJ equivalent 66 brix for next season will be 147,716 tons of FCOJ 66 Brix equivalent. If confirmed, this scenario sets a challenging year for the orange juice processing industry.
Below, historical data for Brazilian orange juice inventories
São Paulo, August 14th, 2018
Ibiapaba Netto
Executive-Director