Citrus Semi-annual 2011

An Expert's View about Citrus Fruits in Brazil

Last updated: 11 Jul 2011

In U.S. MY 2010/11, the Brazilian orange crop is estimated at 495 MBx, up 119 MBx from U.S. MY 2009/10, due to excellent weather conditions that prevailed during blossoming and fruit development.

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: 6/10/2011 GAIN Report Number: BR110012 Brazil Citrus Semi-annual 2011 Approved By: Frederick Giles, Director Agricultural Trade Office, Sao Paulo Prepared By: Sergio Barros, Agricultural Specialist Report Highlights: In U.S. MY 2010/11, the Brazilian orange crop is estimated at 495 MBx, up 119 MBx from U.S. MY 2009/10, due to excellent weather conditions that prevailed during blossoming and fruit development. The Sao Paulo and western Minas Gerais commercial areas should produce 390 MBx. Total FCOJ production (65 Brix equivalent) for U.S. MY 2010/11 is forecast at 1.44 mmt (65 Brix), up 340,000 mt from the previous marketing year. FCOJ equivalent exports for MY 2010/11 are projected at 1.24 mmt (65 Brix), up 50,000 mt compared to the previous marketing year. There is a one year lag between the Brazilian (BR) Marketing Year (MY) and the U.S. Marketing year (MY). For example, BR MY 2011/2012 is equivalent to U.S. MY 2010/11. As such and to ensure data continuity, the current Brazilian MY 2011/12 will be referred to as U.S. MY 2010/11 throughout this report. 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) 2009/10, 2010/11 and MY 2011/12 (July-June), which are equivalent to U.S. MY 2008/09, 2009/10 and 2010/11, respectively. Note: There is a one year lag between the Brazilian marketing year and the U.S. marketing year. For example, BR MY 2011/2012 is equivalent to U.S. MY 2010/11. As such and to ensure data continuity, the current Brazilian MY 2011/12 will be referred as U.S. MY 2010/11 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 08/09 US MY 09/10 US MY 10/11 Item/Brazilian Marketing Year BR 2009/10 BR 2010/11 BR 2011/12 Area Planted 816.0 800.0 803.0 Sao Paulo 616.0 600.0 603.0 Others 200.0 200.0 200.0 Area Harvested 724.6 724.6 727.6 Sao Paulo 532.0 532.0 535.0 Others 192.6 192.6 192.6 Bearing Trees 216.2 219.0 221.0 Sao Paulo 164.2 167.0 169.0 Others 52.0 52.0 52.0 Non-Bearing Trees 49.0 40.0 40.0 Sao Paulo 45.0 36.0 36.0 Others 4.0 4.0 4.0 Total Trees 265.2 259.0 261.0 Total Production 417.0 376.0 495.0 Sao Paulo 320.0 273.0 390.0 Others 97.0 103.0 105.0 Exports 0.7 1.0 1.0 Sao Paulo 0.7 1.0 1.0 Domestic Consumption 129.3 116.0 149.0 Delivered to processors 287.0 259.0 345.0 Sao Paulo (FCOJ + NFC exports) 274.0 244.0 330.0 Others 13.0 15.0 15.0 General In MY 2010/11 (July-June), the Agricultural Trade Office (ATO)/Sao Paulo forecasts the total Brazilian crop at 495 million 40.8 kg boxes (Mbx), a 32 percent increase compared to the previous season. The commercial area of the state of Sao Paulo and the western part of Minas Gerais are expected to produce 390 Mbx, up 43 percent from the previous crop (273 MBx). Note that 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 (15 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, according to updated information provided by the Brazilian Geography and Statistics Institute (IBGE). Approximately 70 percent of the crop should result from a large second blossoming and around 5 percent of the fruit should come from a third blossoming that will likely be harvested in the first quarter of 2012. The harvest has already started mainly for citrus groves owned by the orange juice processor. Nonetheless, the bulk of crushing should occur July-November. According to industry contacts, a higher percentage of early (Hamlin) and late season varieties (Natal and Valencia) should be crushed as opposed to the Pera Rio variety. The projected increase in production for MY 2010/11 in the Sao Paulo and Minas Gerais commercial areas is related to excellent weather patterns during blossoming, fruit setting and development. The prolonged dry weather that negatively impacted the 2010 crop supported the necessary water stress to induce blossoming for the upcoming crop. As opposed to the previous season, adequate rainfall and temperature in the end of the year did not create conditions for the development of the fungus Colletotrichum which highly damaged last year?s crop. Strong citrus prices also contributed to good crop management, therefore, positively affecting the size of the crop. In May 2011, the National Supply Company (CONAB) in the Ministry of Agriculture, Livestock and Supply (MAPA), released the first preliminary orange crop survey for the 2011/12 crop. The survey was conducted in partnership with the Sao Paulo State Institute of Agricultural Economics (IEA) and the Sao Paulo Rural Extension Agency (CATI). Data collection occurred in March-April 2011. The Sao Paulo State, including both commercial and non-commercial areas, is estimated at 354.9 MBx. The survey also reported orange losses in the amount of 14.2 MBx. Note that CONAB/IEA take into account the entire state of Sao Paulo and all varieties of oranges (although approximately 90 percent of the volume is represented by Hamlin, Pera, Natal and Valencia), while ATO estimates follow industry methodology which includes the commercial area of the state plus western part of the Minas Gerais state and the four major citrus varieties for juice processing. CONAB/IEA reports that the state of Sao Paulo orange tree inventory is estimated at 221.17 million trees (189.41 million bearing and 31.76 non-bearing trees). In May 2011, the Brazilian Association of Citrus Exporters (CitrusBR) announced that the 2011/12 orange crop in the citrus belt of the state of Sao Paulo and Minas Gerais is projected at 387 million 40.8 kg boxes. CitrusBr reports that the projection was individually made by each associate and the final result was consolidated by an independent audit company. Area, Tree Inventory and Yields For MY 2010/11, the Brazilian citrus yield is estimated at 2.24 boxes/tree, up 30 percent relative to MY 2009/10 (1.72 boxes/tree). The Sao Paulo commercial grove yield for MY 2010/11 is projected at 2.31 boxes/tree, up 42 percent from the previous crop (1.63 boxes/tree). Total citrus area for MY 2010/11 is estimated at 803,000 hectares (ha), similar to MY 2009/10 (800,00 ha). Total Brazilian tree inventory for MY 2010/11 is estimated at 261 million trees. Tree inventory in the Sao Paulo and Minas Gerais commercial areas are estimated at 205 million trees (169 million bearing and 36 million non-bearing trees). Sao Paulo is the only state that compiles data on trees planted and tree inventory. ATO/Sao Paulo estimates report stable areas and tree population for ?Other? states based on uniform production figures provided by IBGE. 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 follow. Both series track orange prices from September 1994. Prices for the fresh market are for fruit on the tree. According to industry information, approximately 80 percent of the growers have already set contracts with the juice processors for the upcoming crop. Most prices were set during last year?s negotiation. Prices ranged between R$9.00 and R$16.00/box (US$5.00 and US$8.90/box) for last season. Post contacts report that prices will hardly be sustained in the high end of the range for this crop, however, prices received should be attractive to producers. Orange Prices paid by Sao Paulo industry - spot market (Pera, Natal, Valencia varieties, average prices in Reais - R$, 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 -- Jun 8.10 7.97 9.72 3.68 14.70 Jul 10.06 10.93 10.95 3.65 14.88 Aug 10.76 10.16 9.71 5.04 14.90 Sep 11.04 9.78 9.33 5.66 15.19 Oct 11.52 9.89 9.57 5.86 15.23 Nov 12.51 11.77 8.63 6.41 15.35 Dec 14.26 12.61 7.27 6.95 15.66 Source: Center on Advanced Studies on Applied Economics (CEPEA)/ESALQ. Orange Prices received by Producers in the Domestic Market (Pera Variety, average prices in Reais - R$, 40.8 kg box, fruits on the tree). Month 2006 2007 2008 2009 2010 2011 Jan 15.68 15.08 15.38 10.00 10.89 22.86 Feb 19.53 17.10 16.95 9.82 17.22 25.33 Mar 19.08 19.02 17.03 11.13 19.17 26.32 Apr 13.72 16.60 14.65 10.46 16.50 19.62 May 10.68 13.82 12.04 9.13 14.49 14.78 Jun 9.38 11.28 11.39 7.66 15.13 Jul 10.12 10.98 11.38 6.48 14.90 Aug 11.47 11.06 11.01 6.47 14.94 Sep 12.51 10.48 10.64 7.04 16.83 Oct 12.60 11.48 10.83 7.58 19.17 Nov 12.76 13.45 10.24 8.48 19.93 Dec 13.48 14.10 9.70 8.94 20.15 Source: Center on Advanced Studies on Applied Economics (CEPEA)/ESALQ. Consumption During MY 2010/11, total Brazilian orange consumption is estimated at 149 MBx, a 33 Mbx increase from MY 2010/11. These figures include actual domestic consumption plus losses from natural drop, harvesting, transportation and packing. Fruit delivered to processors for ?not from concentrate (NFC)? orange production for the domestic market is also included in these figures. Domestic consumption estimates are taken as the difference between production and the volume of oranges delivered to processors for FCOJ and NFC production for exports. Trade The total fresh orange export estimate for MY 2010/11 is estimated at one Mbx, similar to the previous crop. The table below shows official fresh orange exports (NCM 0805.10.00) by country of destination, according to the Secretariat of Foreign Trade (SECEX). Brazilian Fresh Orange Exports (MT and U$ 1,000 FOB) Jan- Dec 2010 Jul 2009-May 2010 Jul 2010-May 2011 Country Quantity Value Quantity Value Quantity Value Spain 12,795 5,293 3,580 1,585 12,306 5,061 Netherlands 10,465 4,669 8,455 4,013 9,549 4,380 United Kingdom 5,480 2,015 1,288 601 4,906 1,746 Portugal 3,764 1,724 1,800 840 3,764 1,722 Saudi Arabia 2,965 1,527 4,924 2,175 1,414 707 Ireland 1,340 535 1,267 542 1,220 455 Paraguay 421 36 1,316 79 356 30 Macedonia 207 99 0 0 207 99 Russia 149 67 1,495 642 198 94 France 130 72 50 29 130 72 Others 108 239 2,449 1,090 232 480 Total 37,822 16,277 26,624 11,596 34,281 14,846 Source : Brazilian Department of Foreign Trade (SECEX), NCM 0805.10.00 Production, Supply and Demand Data Statistics - Official Oranges, Fresh Brazi 2008/2009 2009/2010 2010/2011 l Market Year Begin: Jul Market Year Begin: Jul Market Year Begin: Jul 2009 2010 2011 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 816,000 816,000 800,000 800,000 800,000 803,000 Area Harvested 616,000 724,600 724,600 724,600 600,000 727,600 Bearing Trees 216,200 216,200 216,000 219,000 217,000 221,000 Non-Bearing Trees 49,000 49,000 40,000 40,000 40,000 40,000 Total No. Of Trees 265,200 265,200 256,000 259,000 257,000 261,000 Production 17,014 17,014 15,300 15,341 17,135 20,196 Imports 0 0 0 0 0 0 Total Supply 17,014 17,014 15,300 15,341 17,135 20,196 Exports 29 28 38 41 40 41 Fresh Dom. 5,274 5,275 4,858 4,733 4,937 6,079 Consumption For Processing 11,711 11,711 10,404 10,567 12,158 14,076 Total Distribution 17,014 17,014 15,300 15,341 17,135 20,196 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 2009/10, 2010/11 and MY 2011/12 (July-June), which are equivalent to U.S. MY 2008/09, 2009/10 and 2010/11, respectively. The tables include Not From Concentrate (NFC) production for exports converted to Frozen Concentrate 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 08/09 US MY 09/10 US MY 10/11 Item/Brazilian Marketing Year BR 2009/10 BR 2010/11 BR 2011/12 Delivered to Processors 287.0 259.0 345.0 Sao Paulo (FCOJ + NFC exports) 274.0 244.0 330.0 Others 13.0 15.0 15.0 Beginning Stocks * 172.0 128.0 4.0 Total Production 1,273.0 1,100.0 1,440.0 Sao Paulo FCOJ 1,060.0 870.0 1,200.0 Sao Paulo NFC (FCOJ equiv) 160.0 170.0 180.0 Others 53.0 60.0 60.0 Total Supply 1,445.0 1,228.0 1,444.0 Exports 1,283.0 1,190.0 1,240.0 Sao Paulo FCOJ 1,070.0 960.0 1,000.0 Sao Paulo NFC (FCOJ equiv) 160.0 170.0 180.0 Others FCOJ 53.0 60.0 60.0 Domestic Consumption 34.0 34.0 35.0 Ending Stocks 128.0 4.0 169.0 Total Distribution 1,445.0 1,228.0 1,444.0 * Sao Paulo FCOJ equiv stocks only. General ATO/Sao Paulo forecasts total Brazilian FCOJ 65 Brix equivalent production for MY 2010/11 (July- June) at 1.44 million metric ton (mmt), up 330,000 metric tons from the previous season, due to higher availability of fruits for processing. The Sao Paulo industry is forecast to process 330 MBx of oranges for FCOJ and NFC production, yielding 1.38 mmt of juice (1.2 mmt and 180,000 metric tons of FCOJ and NFC, respectively). Other producing states are expected to deliver 15 MBx for processing. Processing plants began operations in May, but the bulk of processing should start in July. Total Brazilian FCOJ 65 Brix equivalent production for MY 2009/10 is estimated at 1.1 mmt, down 173,000 metric tons relative to the previous marketing year, due to lower availability of fruit for processing. The Sao Paulo industry has crushed 244 MBx of oranges for FCOJ and NFC production, while other states contributed 15 MBx. Note that 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 The ATO/Sao Paulo estimate for FCOJ domestic consumption for MY 2010/11 is 35,000 mt, 65 Brix, similar to MY 2009/10 (34,000 mt, 65 Brix). Trade Total Brazilian FCOJ exports for MY 2010/11 are projected at 1.24 mmt (65 Brix), up 50,000 metric tons compared to MY 2009/10 (1.19 mmt), due to relatively stable world demand and expected higher availability of juice for exports. The Sao Paulo industry is expected to contribute 1 mmt of FCOJ (65 Brix) and 180,000 mt of NFC (converted to FCOJ equivalent), whereas other FCOJ producing states are expected to export 60,000 mt. Major destinations include Europe and the United States. The tables below show official FCOJ exports (NCM 2009.11.00, NCM 2009.12.00 and 2009.19.00) by country of destination, according to the Secretariat of Foreign Trade (SECEX). Note that 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. Brazilian Frozen Concentrated / Non-Concentrated Orange Juice Exports (MT and US$ 1,000 FOB) Jan-Dec 2010 July 2009-May 2010 July 2010-May 2011 Country Quantity Value Quantity Value Quantity Value Belgium 168,040 241,070 160,372 212,075 135,423 213,708 Japan 56,829 85,133 52,548 65,235 61,793 112,319 China 55,143 73,847 51,591 58,525 59,981 104,116 U.S.A. 73,695 117,387 103,028 133,092 29,831 51,613 Netherlands 25,430 36,822 29,195 28,508 22,227 35,674 South Korea 11,035 17,329 11,011 14,287 12,707 22,385 Switzerland 22,592 31,953 37,468 47,784 12,267 19,070 Australia 8,705 12,088 10,708 12,579 6,398 10,204 Puerto Rico 4,216 6,585 2,861 3,863 6,238 10,123 Chile 4,918 8,981 4,057 4,488 4,866 10,812 Others 36,266 54,337 37,993 44,355 27,247 49,107 Total 466,869 685,531 500,832 624,791 378,978 639,132 Source : Brazilian Secretariat of Foreign Trade (SECEX) NCM 2009.11.00 Brazil Orange Juice Exports, Not Frozen and Brix under 20 (MT and US$ 1,000 FOB) Jan-Dec 2010 July 2009-May 2010 July 2010-May 2011 Country Quantity Value Quantity Value Quantity Value Belgium 441,163 145,134 364,214 115,860 440,395 151,245 U.S.A. 262,070 97,533 225,037 80,694 267,837 95,752 Netherlands 232,667 91,118 218,406 83,427 242,310 102,024 Switzerland 14,332 4,368 30,241 9,169 5,710 1,765 Australia 0 0 0 0 139 102 Hong Kong 227 167 126 92 126 91 Japan 66 60 21 16 76 72 Guyana 15 14 14 13 9 9 Paraguay 2 2 1 1 3 3 Morocco 0 0 0 0 2 2 Others 0 0 311 236 0 0 Total 950,541 338,397 838,372 289,507 956,606 351,065 Source : Brazilian Department of Foreign Trade (SECEX), NCM 2009.12.00 Brazil Orange Juice Exports, Others (MT and US$ 1,000 FOB) Jan 2010-Dec 2010 July 2009-May 2010 July 2010-May 2011 Country Quantity Value Quantity Value Quantity Value Belgium 261,236 334,171 238,387 238,484 255,307 421,885 Netherlands 198,303 290,368 188,292 185,144 169,641 336,769 U.K. 47,808 61,066 51,563 45,189 41,539 73,908 U.S.A. 24,125 31,146 30,215 29,423 20,324 31,394 Australia 9,010 9,911 9,020 7,669 9,012 11,716 Puerto Rico 6,302 7,667 2,009 1,607 5,387 8,085 Switzerland 9,585 11,662 7,093 6,984 4,019 7,833 Japan 0 0 5,057 4,820 2,208 3,974 South Korea 2,404 2,715 38 42 1,004 1,831 Iran 252 277 0 0 353 387 Others 1,210 1,847 2,034 2,544 591 975 Total 560,235 750,831 533,708 521,905 509,384 898,756 Source : Brazilian Department of Foreign Trade (SECEX), NCM 2009.19.00 Stocks Total ending stocks for U.S. MY 2010/11 are estimated at 169,000 mt, 65 Brix, up 165,000 mt relative to the revised MY 2009/10 stocks. Note that these figures include only stocks in the storage tanks of the orange juice processing facilities. Actual stocks data for the aforementioned inventories are not available. In May, CitrusBR announced that global Brazilian orange juice inventories were 424,702 metric tons in March 31, 2001. 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 ? Official Orange Juice Brazi 2008/2009 2009/2010 2010/2011 l Market Year Begin: Jul Market Year Begin: Jul Market Year Begin: Jul 2009 2010 2011 USDA A O Po USDA st ost fficia New l Officia New Po USD st l Officia New Pl Deliv. To 11,709,600 11,709,600 10,404,000 10,567,200 12,158,000 14,076,000 Processors Beginning 172,000 172,000 128,000 128,000 14,000 4,000 Stocks Production 1,273,000 1,273,000 1,085,000 1,100,000 1,273,000 1,440,000 Imports 0 0 0 0 0 0 Total Supply 1,445,000 1,445,000 1,213,000 1,228,000 1,287,000 1,444,000 Exports 1,283,000 1,283,000 1,165,000 1,190,000 1,223,000 1,240,000 Domestic 34,000 34,000 34,000 34,000 35,000 35,000 Consumption Ending Stocks 128,000 128,000 14,000 4,000 29,000 169,000 Total 1,445,000 1,445,000 1,213,000 1,228,000 1,287,000 1,444,000 Distribution 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 1/ 2.35 2.16 1.93 1.64 1.95 1.80 1.57 July 2.39 2.18 1.88 1.57 1.87 1.75 -- August 2.36 2.14 1.96 1.63 1.88 1.75 -- September 2.22 2.17 1.84 1.92 1.78 1.69 -- October 2.25 2.14 1.74 2.12 1.74 1.70 -- November 2.21 2.17 1.78 2.33 1.75 1.71 -- December 2.26 2.14 1.77 2.34 1.74 1.66 -- Source : Gazeta Mercantil and BACEN (as of October 2006) 1/ June 2011 refers to June 07.
Posted: 11 July 2011, last updated 11 July 2011

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