Citrus Annual

An Expert's View about Citrus Fruits in Brazil

Posted on: 26 Dec 2011

During MY 2011/12 (July/June), the Agricultural Trade Office in Sao Paulo (ATO/Sao Paulo) projects the total Brazilian orange crop at 445 MBx, a 12 percent decrease compared to the current crop (MY 20

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 12/7/2011 GAIN Report Number: BR1100027 Brazil Citrus Annual 2011 Approved By: Frederick Giles, Director Agricultural Trade Office, Sao Paulo Prepared By: Sergio Barros, Agricultural Specialist Report Highlights: This report updates BR110012. In U.S. MY 2011/12, the Brazilian orange crop is projected at 445 MBx, down 61 MBx from U.S. MY 2010/11, assuming regular weather conditions prevail during fruit setting and development. The Sao Paulo and western Minas Gerais commercial areas should produce 340 MBx. Total FCOJ production (65 Brix equivalent) for U.S. MY 2011/12 is forecast at 1.245 mmt (65 Brix), down 195,000 mt compared to the previous marketing year. FCOJ equivalent exports for U.S. MY 2011/12 are projected at 1.245 mmt (65 Brix), slightly up from the previous season. Commodities Oranges, Fresh Production PS&D Tables The following tables provide revised data for Sao Paulo and total Brazilian fresh orange production, supply and demand (PS&D) for Brazilian (BR) marketing years (MY) 2010/11, 2011/12 (July-June) and the initial forecast for MY 2012/13, which are equivalent to U.S. MY 2009/10, 2010/11 and 2011/12, respectively. Note: There is a one year lag between the Brazilian marketing year and the U.S. marketing year. For example, BR MY 2012/2013 is equivalent to U.S. MY 2011/2012. As such and to ensure data continuity, the current Brazilian MY 2012/13 will be referred to as U.S. MY 2011/12 throughout this report Brazil: Fresh Oranges PS&D (Jul-Jun) (1,000 ha, million trees & million 40.8 kg boxes) Item/U.S. Marketing Year US MY 09/10 US MY 10/11 US MY 11/12 Item/Brazilian Marketing Year BR 2010/11 BR 2011/12 BR 2012/13 Area Planted 800.0 810.0 803.0 Sao Paulo 600.0 610.0 603.0 Others 200.0 200.0 200.0 Area Harvested 724.6 734.6 727.6 Sao Paulo 532.0 542.0 535.0 Others 192.6 192.6 192.6 Bearing Trees 219.0 223.0 221.0 Sao Paulo 167.0 171.0 169.0 Others 52.0 52.0 52.0 Non-Bearing Trees 40.0 40.0 40.0 Sao Paulo 36.0 36.0 36.0 Others 4.0 4.0 4.0 Total Trees 259.0 263.0 261.0 Total Production 378.0 506.0 445.0 Sao Paulo 275.0 400.0 340.0 Others 103.0 106.0 105.0 Exports 1.0 1.0 1.0 Sao Paulo 1.0 1.0 1.0 Domestic Consumption 118.0 156.0 132.0 Delivered to processors 259.0 349.0 312.0 Sao Paulo (FCOJ + NFC exports) 247.0 335.0 298.0 Others 12.0 14.0 14.0 General During MY 2011/12 (July/June), the Agricultural Trade Office in Sao Paulo (ATO/Sao Paulo) projects the total Brazilian orange crop at 445 MBx, a 12 percent decrease compared to the current crop (MY 2010/11), assuming that good weather conditions prevail as of December 2011 to support fruit setting and development. The commercial area in the state of Sao Paulo and the western part of Minas Gerais should account for 340 MBx. This figure takes into account the four major varieties of citrus used for processing orange juice (Hamlin, Pera Rio, Natal and Valencia) plus a limited volume (10 million boxes) of other citrus varieties such as Lima, Bahia, Murcorte and Poncan which are used for processing juice. Production from other states is projected at 105 MBx. It is still too early to project the orange production for MY 2011/12. More accurate numbers should be available only during the first quarter of 2012. The current forecast is based on the excellent second blossoming in October in the majority of the citrus areas, notably in the central and northern growing regions which benefitted from water stress in the previous months. ATO/Sao Paulo revised the Brazilian orange crop estimate for MY 2010/11 to 506 MBx, up 11 MBx relative to the previous estimate (495 MBx). The commercial citrus area in Sao Paulo should account for 400 MBx, up 3 percent compared to the previous figure due to likely higher size of the fruits. The harvest should extend through February 2012. The production estimate for states other than Sao Paulo is 106 MBx, according to updated information provided by the Brazilian Geography and Statistics Institute (IBGE). In August 2011, the National Supply Company (CONAB) in the Ministry of Agriculture, Livestock and Supply (MAPA), released the second orange crop survey for the 2011 crop (BR MY 2011/12). The survey was conducted in partnership with the Sao Paulo State Institute of Agricultural Economics (IEA) and the Sao Paulo Rural Extension Agency (CATI). The Sao Paulo state crop, including both commercial and non-commercial areas, is estimated at 377 MBx. The survey also reports orange losses in the amount of 6.3 MBx. Note that CONAB/IEA take into account the entire state of Sao Paulo and all varieties of oranges, while ATO estimates follow the citrus industry methodology which includes the commercial area of the state plus the western part of Minas Gerais and the four major citrus varieties for juice processing. IEA reports that the state of Sao Paulo orange tree inventory is estimated at 219 million trees (196.3 million bearing trees and 22.7 million non-bearing trees). Area, Tree Inventory and Yields For MY 2011/12, the Brazilian agricultural yield is forecast at 2.01 boxes/tree, an 11 percent decrease compared to the current season (2.27 boxes/tree), assuming normal weather conditions as of December 2011. The Sao Paulo commercial grove yield for MY 2010/11 was revised to 2.34 boxes/tree, slightly up from the previous figure, due to larger fruit size than previously estimated. Total orange area for MY 2011/12 is projected at 803,000 hectares (ha), down 7,000 ha vis-à-vis last season, due to higher number of trees per hectare. Total Brazilian tree inventory for MY 2011/12 is projected at 221 million trees, down 2 million trees compared to the previous season. Sao Paulo is the only state that compiles data on tree planted and tree inventory. ATO/Sao Paulo estimates report stable area and tree population for “Other” states based on uniform production figures provided by IBGE. Diseases According to the 2011 greening survey conducted by the Citriculture Defense Fund (Fundecitrus), 53.3 percent of the sampled blocks are affected by greening. In spite of the high number of blocks affected by greening, the number of affected trees is still low – 3.8 percent. The central and southern regions are the most affected citrus growing areas with 6 and 5 percent of affected trees, respectively. Fundecitrus also reports that the 2011 Citrus Chlorosis Variegated (CVC) field survey shows that 40.24 percent of sampled trees in the Sao Paulo and western Minas Gerais commercial areas show symptoms of the disease as opposed to 35.5 percent in 2010. Results indicate that 7.04 percent of sampled trees show symptoms restricted to leaves (Grade 1), while 33.2 percent show leaf and fruit symptoms (Grade 2). Producers’ Prices The Orange Index price series is published by the University of Sao Paulo’s College of Agriculture “Luiz de Queiroz” (ESALQ) for both the fresh domestic market and product delivered to orange juice processing plants in the state of Sao Paulo. Both series track orange prices from September 1994. Prices for the fresh market are for fruit on the tree. Orange Prices received by Producers in the Domestic Market (Pera Variety, average prices in Reais - R$, 40.8 kg box, fruits on the tree). Month 2006 2007 2008 2009 2010 2011 Jan 15.68 15.08 15.38 10.00 10.89 22.86 Feb 19.53 17.10 16.95 9.82 17.22 25.33 Mar 19.08 19.02 17.03 11.13 19.17 26.32 Apr 13.72 16.60 14.65 10.46 16.50 19.62 May 10.68 13.82 12.04 9.13 14.49 14.78 Jun 9.38 11.28 11.39 7.66 15.13 12.17 Jul 10.12 10.98 11.38 6.48 14.90 11.05 Aug 11.47 11.06 11.01 6.47 14.94 10.15 Sep 12.51 10.48 10.64 7.04 16.83 9.75 Oct 12.60 11.48 10.83 7.58 19.17 10.20 Nov 12.76 13.45 10.24 8.48 19.93 9.51 Dec 13.48 14.10 9.70 8.94 20.15 Source: CEPEA/ESALQ. November 2011 refers to November 29. Orange Prices paid by Sao Paulo industry - spot market (Pera, Natal, Valencia varieties, average prices in Reais - R$, 40.8 kg box, fruits delivered to the processing plant). Month 2006 2007 2008 2009 2010 2011 Jan 12.13 15.46 13.46 6.80 7.70 15.59 Feb 9.90 15.50 12.39 5.92 9.77 15.00 Mar 8.66 13.68 9.66 4.95 10.17 15.00 Apr 7.58 8.79 8.38 4.50 8.24 15.00 May 7.21 7.88 8.27 4.05 13.00 n/a Jun 8.10 7.97 9.72 3.68 14.70 n/a Jul 10.06 10.93 10.95 3.65 14.88 n/a Aug 10.76 10.16 9.71 5.04 14.90 n/a Sep 11.04 9.78 9.33 5.66 15.19 n/a Oct 11.52 9.89 9.57 5.86 15.23 n/a Nov 12.51 11.77 8.63 6.41 15.35 n/a Dec 14.26 12.61 7.27 6.95 15.66 -- Source: CEPEA/ESALQ. Note that CEPEA has not reported orange prices paid by the Sao Paulo industry in the spot market since the beginning of the current season given that citrus growers and processors, mediated by the Ministry of Agriculture, Livestock and Supply (MAPA) agreed on a reference price plus bonus for MY 2011/12 as described below: 1. The orange price for MY 2011/12 is set at the reference price of R$ 10.00 per 40.8 kg box plus bonus. The bonus is based on the international price for orange juice. 2. Bonus: producers will receive R$ 0.1646/box for every US$ 100/metric ton of frozen concentrated orange juice (FCOJ) above US$ 2,100/ton. FCOJ price will be calculated at the end of MY 2011/12 for the period of July 2011-June 2012 based on 80 percent of the FCOJ price in Europe and 20 percent of the price of FCOJ quoted on the New York Exchange (minus the U.S. import duty). 3. If the bonus calculated on item #2 above is lower than R$ 0.50/box, orange juice processors will guarantee the payment of a minimum bonus of R$ 0.50/box, therefore, the minimum orange prices paid for orange growers is R$ 10.50/box. 4. Orange growers will receive the bonus in August 2012 after FCOJ prices are audited. 5. Orange Juice processors are eligible for a Special Line of Credit (“Linha Especial de Credito” – LEC) established in Resolution #3.986/11 from the National Monetary Council (“Conselho Monetario Nacional” – CMN) if they pay citrus growers the reference price defined in item #1 above of R$ 10/box of orange. However, processors commit themselves to store the resulting FCOJ production until June 30, 2012. For example, processors cannot sell the orange juice processed with the use of LEC before June 30, 2012. Total lending amount for processors was set at R$ 300 million at the interest rate of 6.75 percent per year. According to MAPA, R$ 245 million was taken by processors, which corresponds to approximately 24 MBxs of oranges and 100,000 mt of FCOJ. Consumption During MY 2011/12, total Brazilian orange consumption is forecast at 132 MBx, down 24 MBx compared to MY 2010/11 (156 MBx). These figures include actual domestic consumption plus losses from natural drop, harvesting, transportation and packing. Fruit delivered to processors for “not from concentrated (NFC)” orange production for the domestic market is also included in these figures. Domestic consumption estimates are calculated as the difference between production estimates and the volume of oranges delivered to processors for FCOJ and NFC produced for exports. Trade Total fresh orange exports for MY 2011/12 are forecast at 1 MBx, similar to the current season. The majority of exports occur during the harvest of the commercial crop (June-December). The table below shows official fresh orange exports (NCM 0805.10.00) by country of destination, for BR MY 2010/11 (July-June), and BR MY 2011/12 (July-October), according to SECEX. Brazilian Fresh Orange Exports (MT and US$ 1,000 FOB) MY 2010/11 1/ MY 2010/11 2/ MY 2011/12 2/ Country Quantity Value Quantity Value Quantity Value Spain 12,306 5,061 12,306 5,061 8,363 4,201 Netherlands 10,878 4,935 9,103 4,167 8,997 4,324 UK 5,316 1,968 4,906 1,746 5,523 2,575 Portugal 3,764 1,722 3,764 1,722 3,205 1,628 Saudi Arabia 1,920 984 1,017 489 417 158 Ireland 1,220 455 1,220 455 549 254 Paraguay 356 30 5 3 0 0 COVEITE 277 152 0 0 52 18 Macedoia 207 99 207 99 0 0 Russia 198 94 149 67 844 336 Others 465 707 229 119 1,361 769 Total 36,906 16,206 32,906 13,928 29,311 14,262 Source : Brazilian Department of Foreign Trade (SECEX), NCM 0805.10.00 Note : 1/ July - June 2/ July – Oct Production, Supply and Demand Data Statistics Oranges, Fresh Brazil 2009/2010 2010/2011 2011/2012 Market Year Begin: Jul 2010 Market Year Begin: Jul 2010 Market Year Begin: Jul 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 800,000 800,000 803,000 810,000 803,000 Area Harvested 724,600 724,600 727,600 734,600 727,600 Bearing Trees 219,000 219,000 221,000 223,000 221,000 Non-Bearing Trees 40,000 40,000 40,000 40,000 40,000 Total No. Of Trees 259,000 259,000 261,000 263,000 261,000 Production 15,341 15,422 20,196 20,645 18,156 Imports 0 0 0 0 0 Total Supply 15,341 15,422 20,196 20,645 18,156 Exports 37 41 41 41 41 Fresh Dom. Consumption 4,737 4,814 6,079 6,365 5,385 For Processing 10,567 10,567 14,076 14,239 12,730 Total Distribution 15,341 15,422 20,196 20,645 18,156 HECTARES, 1000 TREES, 1000 MT Commodities Orange Juice Production PS&D Tables The following tables provide revised data for Sao Paulo and total Brazilian orange juice production, supply and demand (PS&D) for Brazilian marketing years 2010/11, 2011/12 (July-June) and the initial forecast for MY 2012/13, which are equivalent to U.S. MY 2009/10, 2010/11 and 2011/12, respectively. Note: There is a one year lag between the Brazilian marketing year and the U.S. marketing year For example, BR MY 2012/2013 is equivalent to U.S. MY 2011/2012. As such and to ensure data continuity, the current Brazilian MY 2012/13 will be referred to as U.S. MY 2011/12 throughout this report The tables include NFC production for exports converted to Frozen Concentrated Orange Juice (FCOJ), 65 Brix equivalent, using the following conversion factor: 1 metric ton of FCOJ 65 Brix equals 5.6 metric tons of NFC 11.6 Brix. Brazil: FCOJ PS&D (Jul-Jun) (Million 40.8 kg boxes, TMT, 65 degrees brix) Item/U.S. Marketing Year US MY 09/10 US MY 10/11 US MY 11/12 Item/Brazilian Marketing Year BR 2010/11 BR 2011/12 BR 2012/13 Delivered to Processors 259.0 349.0 312.0 Sao Paulo (FCOJ + NFC exports) 247.0 335.0 298.0 Others 12.0 14.0 14.0 Beginning Stocks * 128.0 15.0 205.0 Total Production 1,095.0 1,440.0 1,245.0 Sao Paulo FCOJ 870.0 1,200.0 1,000.0 Sao Paulo NFC (FCOJ equiv) 185.0 190.0 195.0 Others 40.0 50.0 50.0 Total Supply 1,223.0 1,455.0 1,450.0 Exports 1,173.0 1,210.0 1,245.0 Sao Paulo FCOJ 948.0 970.0 1,000.0 Sao Paulo NFC (FCOJ equiv) 185.0 190.0 195.0 Others FCOJ 40.0 50.0 50.0 Domestic Consumption 35.0 40.0 42.0 Ending Stocks 15.0 205.0 163.0 Total Distribution 1,223.0 1,455.0 1,450.0 * Sao Paulo FCOJ equiv stocks only. General ATO/Sao Paulo projects total Brazilian FCOJ 65 Brix equivalent production for MY 2011/12 at 1.245 million metric tons (mmt), down 195,000 mt compared to the previous season, due to expected lower availability of fruit for processing. The Sao Paulo industry is expected to process 298 MBx of oranges for orange juice production (250 MBx and 48 MBx for FCOJ and NFC production, respectively), accounting for 1.195 mmt of juice (1.000 mmt and 195,000 metric tons of FCOJ and NFC, respectively). Other producing states should deliver 14 MBx for processing. Total Brazilian FCOJ 65 Brix equivalent production for MY 2010/11 is estimated at 1.44 mmt, a 345,000 mt increase relative to the previous marketing year, due to higher availability of fruit for processing and the need to reset orange stocks which were significantly low in the end of the previous crushing period. The Sao Paulo industry should account for 335 MBx for crushing, whereas other states should contribute 14 MBx. Orange juice figures include NFC production for exports converted to FCOJ 65 Brix equivalent. There is no official estimate for NFC supply and demand in Brazil. Consumption FCOJ domestic consumption for MY 2011/12 is projected at 42,000 mt, 65 Brix, up 2,000 mtfrom MY 2010/11, due to the growing trend in consumption of ready to go orange juice and nectars. Trade In MY 2011/12, total Brazilian FCOJ 65 Brix equivalent exports are projected at 1.245 mmt, slightly up from MY 2010/11 (1.21 mmt). FCOJ markets in western Europe are mature and the increase in NFC consumption is somewhat offset by the decrease on FCOJ utilization. The Sao Paulo industry should supply 1.195mt, 65 Brix equivalent. The tables below show official orange juice exports (NCM 2009.11.00, NCM 2009.12.00 and 2009.19.00) by country of destination for BR MY 2010/11 (July-June), and BR MY 2011/12 (July- October), according to SECEX. The “Others” category includes both FCOJ and NFC exports. Post considers the average monthly price by country of destination for the “Others” category as a criterion to distinguish between FCOJ and NFC exports Frozen Concentrated / Non-Concentrated Orange Juice Exports (MT and US$ 1,000 FOB) MY 2010/11 1/ MY 2010/11 2/ MY 2011/12 2/ Country Quantity Value Quantity Value Quantity Value Belgium 146,509 235,902 68,085 101,877 56,634 112,014 Japan 74,923 138,826 24,856 40,058 12,636 30,099 China 62,667 110,063 21,216 32,822 14,601 30,471 USA 39,346 71,067 18,293 30,669 31,649 62,528 Netherlands 22,500 36,168 10,841 16,131 22,444 46,465 South Korea 16,824 30,628 6,779 12,024 3,802 9,312 Switzerland 12,267 19,070 6,952 10,473 5,417 11,176 Australia 6,754 10,877 2,505 3,701 1,528 3,621 Puerto Rico 6,351 10,366 2,112 3,308 0 0 Chile 5,232 11,720 1,790 3,745 1,554 3,852 Others 29,511 53,726 12,800 20,906 13,182 29,459 Total 422,883 728,412 176,227 275,714 163,446 338,998 Source : Brazilian Department of Foreign Trade (SECEX), NCM 2009.11.00 Note : 1/ July - June 2/ July - Oct Brazilian Orange Juice Exports, Not Frozen and Brix under 20 (MT and US$ 1,000 FOB) MY 2010/11 1/ MY 2010/11 2/ MY 2011/12 2/ Country Quantity Value Quantity Value Quantity Value Belgium 489,595 171,021 175,705 58,170 157,915 64,249 USA 286,835 103,133 106,254 38,573 128,530 49,624 Netherlands 280,774 118,007 63,742 26,048 85,005 34,563 Switzerland 5,710 1,765 1,950 637 0 0 Australia 139 102 0 0 0 0 Hong Kong 126 91 76 57 0 0 Japan 87 84 27 23 0 0 Guiana 9 9 2 2 5 5 Paraguay 3 3 0 0 1 1 Morroco 2 2 0 0 0 0 Others 0 0 0 0 26 59 Total 1,063,279 394,217 347,756 123,511 371,481 148,500 Source : Brazilian Department of Foreign Trade (SECEX), NCM 2009.12.00 Note : 1/ July - June 2/ July - Oct Brazilian Orange Juice Exports, Others (MT and US$ 1,000 FOB) MY 2010/11 1/ MY 2010/11 2/ MY 2011/12 2/ Country Quantity Value Quantity Value Quantity Value Belgium 269,361 451,400 105,557 145,225 85,433 185,073 Netherlands 186,750 370,616 71,071 126,848 47,976 94,685 UK 44,489 79,219 18,832 28,736 17,952 36,169 USA 20,324 31,394 4,969 7,205 15,117 31,836 Australia 13,518 21,177 4,506 4,957 0 0 Puerto Rico 5,387 8,085 998 1,447 3,018 5,539 Switzerland 4,019 7,833 2,018 3,431 5,219 10,922 Japan 2,208 3,974 0 0 0 0 South Korea 1,004 1,831 0 0 0 0 Iran 353 387 202 222 0 0 Others 952 1,910 328 538 817 1,375 Total 548,364 977,824 208,482 318,609 175,533 365,600 Source : Brazilian Department of Foreign Trade (SECEX), NCM 2009.19.00 Note : 1/ July - June 2/ July - Oct Stocks Ending stocks for MY 2011/12 are projected at 163,000 mt, 65 Brix, down 20 percent compared to MY 2010/11 (205,000 mt). Note that these figures include only stocks in the storage tanks of orange juice processing facilities. Actual stocks data for the aforementioned inventories are not available. According to the Brazilian Association of Citrus Exporters (CitrusBR), global Brazilian orange juice inventories were 214,000 metric tons in June 30, 2011. Global Brazilian inventories include stocks in the tanks, at the port, at the vessels and juice processors’ storage facilities worldwide. Production, Supply and Demand Data Statistics Orange Juice Brazil 2009/2010 2010/2011 2011/2012 Market Year Begin: Jul 2010 Market Year Begin: Jul 2011 Market Year Begin: Jul 2012 USDA Official New Post USDA Official New Post USDA Official New Post Deliv. To Processors 10,567,200 10,567,200 14,076,000 14,239,200 12,729,600 Beginning Stocks 128,000 128,000 4,000 15,000 205,000 Production 1,100,000 1,095,000 1,440,000 1,440,000 1,245,000 Imports 0 0 0 0 0 Total Supply 1,228,000 1,223,000 1,444,000 1,455,000 1,450,000 Exports 1,190,000 1,173,000 1,240,000 1,210,000 1,245,000 Domestic Consumption 34,000 35,000 35,000 40,000 42,000 Ending Stocks 4,000 15,000 169,000 205,000 163,000 Total Distribution 1,228,000 1,223,000 1,444,000 1,455,000 1,450,000 MT Exchange Rate Exchange Rate (R$/US$1.00 - official rate, last day of period) Month 2005 2006 2007 2008 2009 2010 2011 January 2.62 2.22 2.12 1.76 2.32 1.87 1.67 February 2.60 2.14 2.12 1.68 2.38 1.81 1.66 March 2.67 2.17 2.05 1.75 2.25 1.78 1.62 April 2.53 2.09 2.03 1.69 2.18 1.77 1.57 May 2.40 2.30 1.93 1.63 1.97 1.81 1.57 June 2.35 2.16 1.93 1.64 1.95 1.80 1.56 July 2.39 2.18 1.88 1.57 1.87 1.75 1.56 August 2.36 2.14 1.96 1.63 1.88 1.75 1.59 September 2.22 2.17 1.84 1.92 1.78 1.69 1.85 October 2.25 2.14 1.74 2.12 1.74 1.70 1.69 November 2.21 2.17 1.78 2.33 1.75 1.71 1.81 December 1/ 2.26 2.14 1.77 2.34 1.74 1.66 1.79 Source : Gazeta Mercantil and BACEN (as of October 2006) 1/ December 2011 refers to December 1.
Posted: 26 December 2011

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