Orange juice prices hit record

Oranges being washed at Brazilian orange juice factory in Araraquara More than half the world's orange juice comes from Brazil

Related Stories

The price of orange juice on the global markets has hit a record high, after surging over the past few days.

Traders say the main reasons are safety concerns about juice from Brazil, the world's largest producer of orange juice, and cold weather in Florida.

The US Food and Drug Administration said carbendazim, a fungicide, has been found in shipments from Brazil.

Orange juice has risen by about 25% since the beginning of the year, to $2.12 a pound.

Carbendazim is banned in the US, but is used legally in Brazil to treat black spot, a type of mould that grows on trees.

"Consumption of carbendazim at the low levels that have been reported does not raise safety concerns," the FDA said in a letter published on its website.

The FDA said any orange juice which could be a risk to the public would be removed from supermarket shelves.

The FDA said it would "deny entry to shipments that test positive for carbendazim".

Damaged crop

That is what has spooked the market.

In 2010-11, Brazil produced more than half of the world's orange juice, according to figures from the US Department of Agriculture.

Orange juice production

  • Brazil: 1,440,000 tonnes
  • US: 645,000 tonnes
  • Mexico: 85,000 tonnes
  • EU: 73,000 tonnes

Source: US Department of Agriculture Foreign Agricultural Service, 2011

"We could have quite a shortage of product on the global market," Michael Smith, the president of T&K Futures and Options based in Florida, told the BBC World Service.

The US is the second-largest producer of orange juice, with production mainly concentrated in Florida.

A few days of cold weather in Florida has led to ice being found in some fruit and damage to tree leaves.

"We had two nights in parts of Florida where we had below zero temperatures. That will definitely cause damage," said Mr Smith.

The market for orange juice is relatively small, compared with other commodities such as coffee and cocoa.

So large price movements can happen suddenly, say analysts, but Tuesday's was regarded as dramatic.

"If we take Brazilian OJ out of the market, it has not reached its peak certainly. We're in uncharted waters," said James Cordier, president of Liberty Trading Group in Florida.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

  • HandshakeKiss and make up

    A marriage counsellor on healing the referendum hurt


  • Pellet of plutoniumRed alert

    The scary element that helped save the crew of Apollo 13


  • Burnt section of the Umayyad Mosque in the old city of AleppoBefore and after

    Satellite images reveal Syria's heritage trashed by war


  • Woman on the phone in office10 Things

    The most efficient break is 17 minutes, and more nuggets


  • Amir TaakiDark market

    The bitcoin wallet with controversial users


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.