Orange juice futures have collapsed to the lowest in two years as demand remains weak and hopes of a modest production recovery in top grower Brazil emerge. Tariff turmoil is also adding pressure.

The most-active contract in New York fell as much as 4.2 per cent on Monday to US$2.274 per pound of frozen orange juice concentrate, the lowest since March 2023. A weak outlook for North American demand has market speculators turning more bearish, with money managers cutting net-long positions to the lowest in about a year, according to Commodity Futures Trading Commission data for the week ending March 25.

“The recent plunge in OJ spot prices has been dramatic, which I ascribe much to extended weak U.S. consumer demand amid a steady rise in competing juice drinks,” said Kenneth Shea, a senior analyst at Bloomberg Intelligence.

U.S. orange juice consumption fell to a record low last year and is forecast to stay at those levels, according to the United States Department of Agriculture. Meanwhile, Canada, the biggest buyer of American OJ, has included the beverage in its package of retaliatory tariffs.

Prices are down about 57 per cent from a record peak above US$5 in December, with the rally driven by hurricanes in Florida and a fatal citrus disease that has attacked trees both in the state and in Brazil, the world’s top orange juice producer.

Markets are expecting a moderate recovery in Brazilian production on improved weather conditions and higher margins that allowed producers to reinvest in their trees, Rabobank senior analyst Andrés Padilla said in a quarterly report Monday. Still, low stockpiles and structural issues like disease and aging trees may increase volatility and support prices, he said.

Brazilian industry group Fundecitrus is expected to release its first estimate for the 2025-26 crop in May.

Bloomberg.com