Brazilian

Outlook for Brazilian Acreage and Production

Daniel Cooper Acreage, Brazil, Production

Brazilian
The study’s results indicate that over the next decade, there will be a 21.3% reduction of hectares (1 hectare = 2.5 acres) in Brazil’s Citrus Belt.

A study by researchers Gilberto Tozatti, Mauricio Mendez and Rodolfo Castro indicated the likely future significant reduction in Brazilian citrus acreage and production due to huanglongbing (HLB or greening). The calculations are based solely on the current Brazilian Citrus Belt and do not consider future citrus projects happening in areas outside of it.

Tozatti presented the study at the recent International Research Conference on HLB in California. The study received support from the Group of Citrus Consultants (GCONCI). Tozatti summarizes his presentation:

Brazil is the world’s largest orange juice producer, with the citrus sector playing an important role in the Brazilian economy by generating employment and moving over $6.5 billion annually. The industry faces a growing threat from HLB. This disease has been causing significant damage, reducing production and leading to the eradication of orchards.

Estimating the future of orange production and the extent of citrus cultivation in the next decade is important for investor decision-making, but studies in this regard are lacking. A forecasting model was proposed, taking into account the regional prevalence of greening disease and citrus growers’ investment expectations.

The analysis was based on inventory data and the crop estimate survey conducted by Fundecitrus for the Citrus Belt region. This region is an area in the states of São Paulo and southwest Minas Gerais responsible for almost 80% of the country’s planted area and production.

The premises of the decision-making process considered the intention of new plantings and the eradication of orchards according to the incidence of HLB in the region. The process is based on recent history and the drop in productivity of plants with HLB.

The study indicates that over the next decade, there will be a significant reduction (21.3%) of 82,600 hectares in citrus cultivation area, resulting in a total of 305,100 remaining hectares.

Production in five years will be in the range of 249 to 228.6 million boxes, representing a 20% to 21.2% decline. Over a period of 10 years, production will be in the range of 203.7 (down 34.6%) to 182.2 (down 37.1%) million boxes, considering optimistic and pessimistic scenarios, respectively.

These results have relevant implications in the global orange juice market and will guide decision-makers, mainly regarding investments in the Brazilian citrus sector. The model can be updated annually in sync with the crop estimate survey data updates.

The reduction in orange area and production projected by the model will lead to unfulfilled worldwide demand for juice consumption and a price increase over the next decade.

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