Brazilian orange juice

Opportunities and challenges in the global market

Rabobank, 2007
Brazilian orange juice
Opportunities and challenges in the global market
Mariana Gonzalez
mariana.gonzalez@rabobank.com
Tiemen Leijh
Stephen Rannekleiv
October 2007
No part of this publication may be reproduced in any form by print, photo print,
microfilm or any other means without written permission of Rabobank.
Neither Rabobank nor other legal entities in the group to which it belongs, accept
any liability whatsoever for any direct or consequential loss howsoever arising from
any use of this document or its contents or otherwise arising in connection herewith.
Rabobank International
F&A Research and Advisory
E-mail: far@rabobank.com
Website: www.rabobank.com/far
Title
Author

Contributors
Date
Copyright
Disclaimer
Contact address
for this publication
Rabobank Brazilian orange juice |
Table of contents
1
1.1
1.2
1.3
2
2.1
2.2
2.3
2.4
2.5
2.6
3
3.1
3.2
3.3
3.4
4
5
Glossary 2
Introduction 3
Opportunities in the global market 4
Mature markets 7
Developing markets 12
Summary of world demand and trends 15
Global supply 17
Brazil 18
U.S. 22
Mexico 26
China 27
Others 28
Outlook for global supply 28
Challenges faced by Brazil 29
Competition for land 30
Grower-processor relationship 31
Citrus plant diseases 33
Demand-side challenges 34
Analysis of key success factors, opportunities and threats 36
Outlook 37
| Rabobank Brazilian orange juice
Glossary
Glossary of terms
Box Unit of measure used in the citrus industry, indicating the weight of the fruit. One box of oranges is equal to
40.8 kilograms, or 90 pounds.
Brix
Unit of measure which refers to the percentage of soluble solids in orange juice. One degree brix (1 brix) is
equal to 1% of soluble solids.
Single strength orange juice has 11 to 12 brix.
FCOJ from Brazil has 64 to 66 brix.
FCOJ Frozen concentrated orange juice.
Juice drinks Juice drinks have up to 24% juice content.
Nectars Nectars have 25% to 99% juice content.
NFCOJ Not from concentrate orange juice.
Ratio Relation between brix and acidity.
Recon A form of single strength orange juice, which has been reconstituted from FCOJ, sold as ready to drink product
in either chilled or shelf-stable format.
Single strength juice Orange juice at 11 to 12 brix, which is the concentration of orange juice when extracted from oranges and
the concentration of ready to drink retail orange juice products.
SSE Single strength equivalent.
Rabobank Brazilian orange juice |
Introduction
Stakeholders in the orange juice sector in Brazil are currently face to face with a
unique opportunity: growing demand for orange juice in the international market
and a structural reduction of the U.S. production, from which there is little chance
of recovery. The high incidence of citrus plant diseases, triggered by hurricanes,
which increases production costs, coupled with rapid real estate encroachment in
Florida, the main orange growing region in the U.S., are responsible for this fate.
Moreover, there are few other potential contenders to fill the gap that is emerging
as a result of declining output from the worlds largest orange juice consumer.
The combined effect of these factors has resulted in significantly higher prices as
well as a strategic opportunity for Brazil to further increase its dominance in the
world market. Brazil is by far the largest orange producer and accounts for roughly
80% of global orange juice trade (Figure 0.1).
Source: USDA, 2007
Figure 0.1 Brazils share in global orange juice exports (2006)
Brazil 81%
Other 19%
Nonetheless, challenges also abound. In recent years, world demand has slowed
down, led by strong competition from a growing array of other beverages, as well
as the increase in orange juice prices and declining stocks.
The aim of this report is to address the changing dynamics of the global orange
juice market, identifying issues that impact the sectors major stakeholders, namely
orange growers, processors and beverage companies, and provide insight into the
challenges and opportunities that lie ahead.
This report has been published in line with Rabobanks long-term commitment
to the international food and agribusiness. It is one of a series of publications
undertaken by the global department of Food & Agribusiness Research and Advisory.
www.rabobank.com