Orange juice futures are slipping on Tuesday, despite new data highlighting a double-digit increase in US consumer sales. But the decline in prices might be investors betting on this being a short-term boost after more than 20 years of falling sales.
July orange juice futures settled down $0.95, or 0.74%, to $1.268 per pound at 17:59 GMT on the US ICE Futures exchange. Orange juice has had an incredible run in 2020. Over the last week, prices have risen by 10%. In the last month, the classic breakfast staple has climbed 16%. Year-to-date, orange juice is up more than 27%.
According to new data from the Florida Department of Citrus, orange juice retail sales soared 46% to 44 million gallons for the four weeks ending April 11. This is the best performance since January 2015. Despite the declining two-decade trend, consumers might be searching for a way to boost their immunity with vitamin C-rich citrus throughout the coronavirus pandemic.
Shoppers may be spending a tad more than they might have a year ago. It is estimated that supermarket prices have advanced 2.7% since March due to weather conditions impacting production capabilities.
Companies specializing in fruit drinks have witnessed a spike in sales. Florida producer Natalie’s Orchid Island Juice, for instance, reported a 50% increase in sales in the second half of March.
Judy Ganes, the president of J. Ganes Consulting, said this is a “long-awaited break for the industry” that has been decimated by bearish consumer trends, citrus greening, and natural disasters. She told Bloomberg:
The taboos of the past two decades are now erased, and with people trying to shop less frequently, drinking OJ can replace fresh fruit. This was the long-awaited break the industry needed to shake off prior negative posturing and give OJ a fresh start.
If this is part of a long-term shift, there will inevitably be a renewed demand for oranges. But be ready for higher prices: Brazil is anticipating a poor harvest, and Florida’s crops have been damaged from hurricanes.
In other agricultural commodities, July corn futures were flat at $3.2125 per pound. July soybean futures fell $0.02, or 0.24%, to $8.43 a bushel. July wheat futures picked up $0.02, or 0.4%, to 4.99 a bushel.