Brazil’s Citrus Forecast for 2018–19

Global Perspectives

By Marcos Fava Neves

forecast

Marcos Fava Neves

The season’s first orange crop forecast is one of the most important numbers of the year for Brazil’s orange juice business. The citrus forecast for 2018–19 was published on May 9 by Fundecitrus, in cooperation with Markestrat, University of São Paulo and São Paulo State University.

SIZE AND VARIETIES
Brazil expects 288.29 million boxes of oranges in 2018–19. The average size is estimated at 256 fruit per each 40.8 kilogram box.

This total includes:

  • 81 million boxes of Hamlin, Westin and Rubi varieties
  • 55 million boxes of Valencia Americana, Seleta and Pineapple varieties
  • 16 million boxes of the Pera Rio variety
  • 80 million boxes of Valencia and Valencia Folha Murcha varieties
  • 97 million boxes of the Natal variety

TOTAL TREES
Bearing trees of the varieties that make up this estimate total 175.27 million. The georeferenced mapping, which begun with the 2015 inventory, has been through a complete update for this 2018 inventory. New, high-definition, orthorectified images were obtained by the satellites SPOT 6 and SPOT 7 from European Airbus Defence and Space between May and August of 2017.

FRUIT PER TREE
The average number of fruit per tree in April 2018, without considering the drop to occur throughout the season, is 564. The high number of fruit in the 2017–18 crop, along with unfavorable conditions caused mainly by high temperatures in October, led to a reduced fruit setting for the main bloom in regions with later flowering. Approximately 2,200 trees were stripped of fruit. They were distributed proportionally to the total number of orange trees in the citrus belt and were stratified according to region, variety and age.

DROP RATE
The estimated average drop rate is 17 percent. This figure is projected from the perspective of a drier year with temperatures above normal as of October, according to information presented by the meteorological company Climatempo in April 2018. The increased severity of HLB observed in the last two years is likely to continue this season, which accentuates the early fruit drop — even in a year of less fruit per tree.

Results compiled from the inventory and the stripping of trees, obtained throughout the survey, were restricted until the date of publication of the citrus forecast. All information remains confidential until the forecast is announced to the public. The full forecast report is available online (see www.fundecitrus.com.br).

IMPLICATIONS
Brazil needed at least two seasons of a large crop to bring the world juice inventories to a more confortable level. The second season looks like it won’t happen, at least based upon this initial forecast for a small crop in the 2018–19 orange crop.

We are entering another year in which the slightly declining juice demand will be even higher than the supply, bringing the level of inventories down and possibly impacting juice prices. And to complicate matters, recent weather in Brazil has been very dry. The country also had a truckers’ strike that created problems in the orange juice industry.

Marcos Fava Neves is a professor of business in Brazil at the University of São Paulo and the Fundação Getulio Vargas São Paulo School of Business Administration.

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