Igor Utsumi

Igor Utsumi

Staff Writer
The Brazil Business

Updated

The Brazilian Orange Industry

Igor Utsumi

Igor Utsumi

Staff Writer
The Brazil Business

Updated

Despite recent rough years in the citrus market, Brazil is still, by far, the largest orange producer in the world. This article will give an overview of this fruit's production, market size, and exportation.

Background

Almost 35% of all the oranges produced in the world come from Brazil. Ahead of countries like the United States, Mexico, China, and others from the European Union, Brazil is also responsible for more than half of all the orange juice distributed throughout the world. Adequate climate conditions and a large number of producers are some of the factors that help to sustain Brazil's position as market leader.

The main producing area in Brazil is known as the Citric Belt, a region that encloses mostly the state of São Paulo and the western portion of Minas Gerais, known as Triângulo Mineiro. This area alone is responsible for more than 80% of Brazil’s oranges.

São Paulo, itself, has more than 10.1 thousand citrus producers, with crops distributed throughout nearly 500,000 hectares. The city of Itápolis is one of the main producers, as well as Casa Branca, Pirassununga, and Mogi Guaçu.

In the past years, an overproduction was seen among the Brazilian producers, making it necessary to establish measures in order to reduce the stocks. One of the biggest crisis of this sector happened in 2012, when the United States suspended the purchase of Brazilian oranges because of a certain pesticide used on the crop. Better results are expected for the next years, though.

Market Size

The past crisis was a hard hit to the Brazilian fruit industry, but, that was not enough to take from them the title of 'world’s largest orange producer'. The Brazilian production faced a decrease of 16.1% in 2013, according to IBGE or Instituto Brasileiro de Geografia e Estatística, reflecting the government’s attempt to reduce stocks to avoid bigger problems.

With this situation being normalized, the market expects better results over the next years. A study done by the United States Department of Agriculture (USDA) has shown that the 2012/2013 harvest resulted in nearly 16.36 million tons, and there is an expected growth of 8% for the 2013/2014 crop.

This would result in 17.75 million tons of oranges produced by Brazil in this period. The biggest portion of this production, around 12.24 million tons, would be used by the industry, aiming the exports, mainly, for the European Union and the United States.

Orange Juice

The greatest share of Brazil’s oranges is destined for the juice industry. Although it is the most consumed juice in the world, the past decade has not been so good for this branch. The worldwide consumption of the beverage has declined over 5% in recent years.

This fact, however, is mainly pushed by countries other than Brazil. Around 1.16 million tons of orange juice are expected to be produced by the country in the 2013/2014 crop, a growth of 18% over the last period.

Exportation and Internal Market

The largest amount of Brazil’s juice and oranges are exported to nations like Germany, United States, and France. The Brazilian population consumes less than 40 thousand tons of juice per year, what represents around 5% of the American consumption.

Strengthening the domestic market is one of the priorities of producers’ organizations, seeking to be less dependent on other countries and its oscillations. Also, it might be a way of avoiding bigger losses, especially when importing countries apply restrictions. The measure is more noticeable in case such as American oranges being sold domestically below market price, making the industry buy from Florida and other citrus producing American states rather than Brazil.