Drought reduces production in the 2020/21 season; crop failure is the worst in all times

Cepea, January 4, 2021 – In general, citrus prices were high in São Paulo State in 2020. With the lower orange production in the Brazilian citrus belt (São Paulo and the Triângulo Mineiro) in the 2020/21 season due to bad weather conditions, the demand from processors for fruits continued high along the year, which underpinned prices.


According to a report released by Fundecitrus on December 10, crop failure in the citrus belt (SP and the Triângulo Mineiro) should be the worst since 1988/1989, when the series began. In total, orange production should be 30% lower in the 2020/21 season, totaling 269.36 million boxes of 40.8 kilos each.


INDUSTRIAL PRICES – Although processors began the 2020/21 season with high volumes of juice stocked – 471 thousand tons of Frozen Concentrate Orange Juice (FCOJ) Equivalent, according to CitrusBR –, low orange supply kept the demand for fruits high, which reflects on bidding prices.


On the average of the 2020/21 season, prices in the spot market between July and November closed at 23.51 BRL/box, 17.8% up from that in the same period of 2019 and 7% above that in the same period of 2018, in nominal terms.


IN NATURA MARKET – Higher demand from the industry lowered the availability of fruits in the in natura market, since some farmers who usually sell to the in natura market preferred to allocate their fruits to processors, due to the uncertainties caused by the covid-19 pandemic and the attractive prices bid by processors. This scenario added to the weather issues and high demand pushed up orange prices (in natura) all the year. For the variety pera rio, prices hit the highest level of the year in November, when the average was 43.35 BRL/box, on tree, 54.6% up from that in Nov/19, in nominal terms.


TAHITI LIME – The supply of tahiti lime was high between January and April, peak of harvest. Although exports were high in that period, quotes were pressed down by high supply. As trees were packed with fruits at that time, production was lower in the following cycles, pushing up quotes, mainly from July, when nominal records were registered in the series of Cepea (which began in 1996).


The highest average in the year, of 85.15 BRL per 27-kilo box, was observed in August, 183% up from that in August/19. Low production in the second semester was worsened by the drought in some periods. Exports, in turn, set a record in 2020.





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