(Bloomberg) — Orange juice futures reached a record high on rising concerns of citrus greening disease limiting future output in Florida, the top producing US state, and hurting the citrus crop in top exporter Brazil as worldwide supplies dwindle.
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“The proliferation of disease continues to be great in Florida and the chance of a large comeback in production for the new season is limited,” Judy Ganes, president of J. Ganes Consulting, said in an interview. “There are signs that disease is more prevalent in Brazil, too, which is also facing long-term problems with their crops.”
The most-active futures rose by the exchange limit of 10 cents early in New York trading before trimming some gains.
Brazil, the world’s biggest juice exporter, will ship 1.7% less orange juice to the US than last year, according to a July 20 report from the US Department of Agriculture.
Surging prices are also driving a sharp decline in sales volume. Consumption is at its lowest in at least five years in the US, while retail prices peaked at nearly $9 a gallon in July from less than $8 a year earlier, according to data compiled by Nielson and published by Florida Department of Citrus.
“Consumers are taking notice and not drinking much,” Ganes said. “And once they turn away from a product, they don’t necessarily come back.”
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