Rafael Kalaki

World consumption of fruit juices, nectars, and still drinks

In 2009, the world consumed 117.7 billion gallons of industrialized still drinks. Of the total volume, 77% were consumed in 40 countries, with 23.5 million liters in the juice category, 17 million in the nectar category, 42 million in the category of still drinks, and 35 million in the category of powdered and concentrated juices. In the period from 2003 to 2009, the consumed volume of fruit-based beverages increased by 30.2%. However, since much of this growth came from increased consumption in lower social classes in emerging countries, the increase in the sales volume occurred primarily in the categories of nectars and still drinks, and therefore does not reflect an increased demand for orange juice at 66° Brix, because these are categories of beverages that are diluted in water instead of 100% juice (Graph 37)

Impact of climate change on citrus growing

In recent years, several reputable organizations have warned about the risks of climate change to world agriculture. Things are no different in the citrus sector. Data from the National Institute of Meteorology (Inmet) show that there has been a gradual increase in average temperature in several Brazilian states. The comparison is obvious when comparing the averages between two 30-year periods, i.e. from 1930 to 1960, in relation to the numbers obtained in the measurements from 1960 to 1990. Although the curve has remained the same, one can clearly see that the state of Sao Paulo is warmer. In some regions, such as Limeira and Sao Jose do Rio Preto, the numbers obtained between 1995 and 2009 indicate that the temperature is, on average, about two degrees Celsius higher than the historical average (Figure 6).

Breakdown of the price of orange juice on the retail market

In order to give a breakdown of the costs incurred on orange juice up to the purchase thereof by the end consumer, this topic is dedicated to the breakdown of the price starting with the final sale value as reconstituted juice on the shelves of retailers in Germany, the biggest consumer of Brazilian FCOJ, and ending with the residual value that would cover orange production costs and profit margins of growers and industries in Brazil. Some factors, such as poorly accessible data and differences in legislation, prevented a broader analysis of the European market, which accounted for 71% of Brazilian FCOJ exported in 2009.

Peeling back the citrus in Brazil: mapping and quantification of the Brazilian citrus chain.

The CHAINPlan developed by Neves (2007) is a practical process for developing strategic plans for production chains and was applied in several projects in Brazil. One of the initial steps of this method is mapping and quantification of production chains. This step provides knowledge of the size of the production chain analysed, in terms of social and economic magnitude of all the links that comprises it. Here this method is presented in detail, in order to be useful to researchers worldwide interested in mapping and quantifying a chain. Subsequently, we present the results of applying the method in one of the most important agribusiness chain in Brazil, the citrus sector. In this research, the GDP (Gross Domestic Product) of the citrus sector for the 2008/09 crop year was estimated at

Pests and diseases in the Brazil’s citrus belt

6.5 billion. The Citrus GDP per hectare cultivated is twice the Sugarcane GDP per hectare. Here is probably the more updated and profound radiography of the citrus sector in Brazil. This material should serve as a stimulus to decision-making public and private, besides it shows the intimate interconnection between the links in the chain and its ability to generate revenues, taxes and jobs.

Specialty of the major producing countries

This is undoubtedly a major threat to the Brazilian citrus industry. During the last decade, four diseases were responsible for the eradication of 39 million citrus trees in the citrus belt of Sao Paulo and Triangulo Mineiro. As a consequence, the average annual mortality rate, which previously hovered around 4.5% per year, jumped to 7.3 %. Adopting an average yield of two boxes of oranges per tree, it is estimated that citrus canker, CVC, sudden death, and citrus greening accounted for an annual reduction of around 78 million boxes, which - when compared with 317 million boxes harvested in 2009/10 - represents a decrease in harvest of roughly 20% (Table cxm16).

The orange flavor in the BRIC group countries plus Mexico

The world’s foremost citrus producers have different destinations for their production, forming a mix between industrial processing (production of juice), domestic consumption of fresh fruit and export of fresh fruit. Brazil, the world’s largest producer of oranges, sends 70% of its production for industrial processing, with Sao Paulo and the Triângulo Mineiro region sending 86% of their production to this market. To get an idea of the importance of the processing industry for these two Brazilian regions, you must realize that, in Brazil, no other fruit is produced for industrial purposes on a level similar to the production of oranges.

Cycle of working capital and available funding sources

The region formed by the BRIC countries plus Mexico, with 43.4% of the world’s population, consumes 221 thousand tons of FCOJ Equivalent at 66 ° Brix, with 80% in the form of still drinks, 10% in the form of nectar 10% as juice, and a consumption profile per category of beverage typical of countries with lower per capita net income. Between 2003 and 2009, the volume of orange flavored beverages (juice, nectar and still drinks) rose by 50 %, with still drinks rising by 62 %.

Phytosanitary barriers and technical requirements

The orange juice companies are among those most heavily penalized by the long cycles and slippage between the financing of harvests - due to the disbursement of funds to the suppliers of raw materials - and the receivables from international customers. The need for working capital in the juice industries varies from 9 to 11 months and the larger their stocks between one harvest and the next, the greater their need for working capital.

Price of orange juice: an incredible volatility

The main destination markets for citrus products, Europe and the United States, are countries with different market legislation. Brazilian exporters are required to comply with a number of demands concerning phytosanitary issues, packaging, consistency in product quality and regularity of delivery.