Fruit Markets: Then and Now

Tacy Callies Global Perspectives

By Marcos Fava Neves

In the last three decades, world fruit production went from 338 to 865 million tons.

Citrus represents 17 percent of fruit production but is growing at a slower rate (140 percent) than the 155 percent growth rate seen in the total category of all fruits. Within the citrus sector, oranges represented 67 percent of the total share 30 years ago. Today, that figure has shrunk to 55 percent, with soft citrus and lemons seeing greater share.

In the past 30 years, fruit exports have gone from 23 million tons to 87 million tons. All fruits had an incredible 280 percent growth; citrus alone saw an increase of 133 percent. The export share of citrus in three decades dropped from 30 percent of the total to 18.5 percent of all fruit exports.

Total exports of oranges today are around 6.8 million tons, lemons are 3.1 million tons, and soft citrus represents 5 million tons. An analysis of 30 years of data shows that oranges grew, but at a slower pace than other fruits.

The U.S. Department of Agriculture (USDA) expects global orange production in the 2018–2019 crop to grow approximately 4.2 million tons, reaching 51.8 million tons. Good weather in the most important production regions is contributing to the increase.

Brazil will grow 13 percent, reaching 17.8 million tons, using about 5 million tons for the internal fresh market and 12.8 million tons for juice.

China’s production will drop to around 7.2 million tons.

U.S. production will grow to 5 million tons, due to Hurricane Irma recovery, representing a 41 percent increase.

The European Union’s production will increase 4 percent, reaching 6.5 million tons.

Other important citrus producers include Egypt with a 10 percent expansion, reaching 3.4 million tons, followed by South Africa with a 5 percent increase for a total of 1.6 million tons. Mexico is expected to produce 4.6 million tons.

USDA announced May’s forecast of 72.4 million boxes of oranges for Florida, 4.1 million boxes lower than the April forecast. This figure represents a great recovery from last season. However, it is small when com­pared to the more than 200 million boxes that Florida used to produce. Reports show that the bloom for the 2019–2020 crop is good, so maybe we can expect this year’s production level to be similar for next year.

With a smaller crop in Brazil and the recovery in Florida, orange juice inventories are at a low level. This is keeping the price of a ton of juice above $2,000 in Europe. Even a higher 2019–2020 crop in Brazil will have limited capacity to lower prices due to a low inventory level.

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.