High production costs have orange growers in Brazil, the world’s top orange juice exporter, bracing for a tough citrus season, despite last season’s record harvest and high juice prices.
“The orange market is going through its worst moment in two years: World consumption is stagnating, production costs are rising and processors are getting more and more powerful,” said Marco Antonio do Santos, president of the Taquaritinga growers’ union.
In the last season, Brazil produced an estimated 1.4 million tonnes of oranges, well above the 1 million tonnes forecast for the upcoming season.
The record harvest solidified the country’s ranking as the world’s leading orange juice producer and exporter, but it also increased world stocks even as Brazilian exports have been falling since 2007.
Soaring production costs mean the overproduction has not translated into lower prices — prices of concentrated juice have actually tripled since 2005 to reach US$2,300 a tonne — but it is still not enough to keep growers out of the red.
Booming Brazil has updated its labor code and increased its minimum wage, which this year rose to the equivalent of US$337 per month from US$332.
Land lease costs and prices of pesticides linked to oil prices have also risen.
“The government calculated that we have a production cost of about US$5 per crate [40.8kg], while we are selling it at US$3.5 to US$4,” Antonio do Santos said.
“In the citrus belt of Sao Paulo, half of the orange farms have disappeared over the past 10 years, and only the most productive survive,” Antonio do Santos said. “The other producers have switched to sugar cane, corn and soybean.”
According to data from the government’s crop supply agency Conab, 36,700 hectares of orange trees were uprooted between last year and this year.
Independent growers have been hurt by increasing coordination among the companies that process and market the juice.
One coalition of exporters — the Brazilian Association of Citrus Exporters (Citrus BR) — monopolizes 97 percent of orange juice exports.
“We are uniting because the bottling companies are merging,” said Ibiapaba Netto, a spokesman for Citrus BR, adding that, despite the rising price of concentrated juice, they cannot afford to pay growers any extra.
“Orange juice faces new competition from energy drinks, multi-vitamin beverages, cold teas, flavored waters and Chinese apple juice, which is cheaper,” he said.
Both sides agree their industry could benefit from tapping into new markets — and that one with major potential is right at their feet: the domestic Brazilian market, where orange juice is rarely consumed.
“Brazil is booming. In a few years, our country can have as many people drinking orange juice as in Germany, which is the world’s leading consumer per capita,” Antonio do Santos said.
The orange production chain generates more than 200,000 direct jobs in more than 300 Brazilian cities and export revenues of between US$1.5 and US$2.5 billion annually.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary