No agreement for now; production value is 20 percent lower

Citrus growers and juice processors have not reached an agreement about the orange prices and also about the systematic of the long term contracts. They have been negotiating for more than a month.

Farmers ask for a revision for contracts settled years before (between 2.80 and 3.30 dollars per 90-pounds box) to compensate the strong devaluation of the exchange rate and, above all, the great increase of the orange juice prices in the international market after hurricanes reached Florida in 2004 and 2005.

According to Cepea, the production value (fresh fruit market and processing in São Paulo State) totalized 2.47 billion reais in 2005/06, totally harvested in the beginning of this year. The number is 20 percent lower from the previous season (3.088 billion). The worst result is related to the exchange rate and the smaller crop production in São Paulo State.

The new season, starting officially in July, opens with a contradiction: good outlook for the orange juice in the international market (lower global supply in the following years), but lower takings for the Brazilian citrus growers, who have been receiving prices based on the past.

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