Orange processors start purchases in the Brazilian spot market

Cepea, June 2, 2020 – One of the large-sized processors from São Paulo State started purchasing oranges in the Brazilian spot market in late May – this plant, which is located in Araraquara, had been crushing their own fruits since early in the month. Oranges from independent growers were being purchased at the end of the period, mostly early varieties from the 2020/21 crop, and also a low amount of pear oranges.

 

Bidding prices in the spot market were around 24.00 BRL per 40.8-kilo box (harvested and delivered to processors) for all varieties, much higher than that from early in the season, at 18.00 BRL/box. This price rise in the spot was already expected by agents, due to lower supply in the 2020/21 crop.

 

At small-sized processors, primarily those that produce fresh juice, prices may also hit 24.00 BRL/box, depending on fruits yield and quality. It is worth to mention that, as the large-sized processors resumed purchasing oranges, the small-sized processors also tend to increase bidding prices.

 

Crushing should step up from the second fortnight of June, when new plants should start operations. Besides the spot market, the volume of fruits purchased through contracts is also expected to increase, as more fruits reach the ideal maturation stage to be harvested. Still, activities should not be so intense in June, since the 2020/21 crop registered losses in the first flowering, mainly for early varieties, which delayed the crop.

 

As regards contracts, bidding prices were ranging from 23 to 25.00 BRL/box in late May, hitting 26.00 BRL/box for higher volumes and when more than a crop is considered – these may also count on a participation additional on the sales price for juice in the international market.

 

In the in natura market, although more fruits were reaching the ideal maturation stage for this segment (early varieties and the first fruits harvested), supply should not increase much in São Paulo, since crushing is supposed to increase. In this scenario, orange supply should be lower from June, which may underpin prices.

 

BRAZILIAN MARKET IN MAY – In the in natura market of oranges, sales were weak in May, due to the colder weather in São Paulo and the anticipation of some holidays (because of the covid-19 pandemic). Besides, high supply of oranges from the new crop (2019/20) continued to press down quotes for all varieties – purchases from the industry were still low. Thus, in May, the average price for pear oranges was at 26.09 BRL per 40.8-kilo box, on tree, 19.6% lower than that in April.

 

(Cepea-Brazil)

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