Orange juice futures climbed 0.9 per cent to US$1.905 per pound this week

Orange juice futures climbed 0.9 per cent to US$1.905 per pound this week

Orange juice has hit its highest price for four years due to uncertainty surrounding the Florida crop.

Orange juice futures climbed by 0.9% to US$1.905 per pound on Wednesday (22 June), the highest since April 2007.

The increase reflects uncertainty around the orange harvest in the US state of Florida, which, alongside Brazil, is the key contributor to global orange juice supplies. If prices remain high, soft drinks firms such as PepsiCo and Coca-Cola Co could face higher-than-expected costs.

The US Department of Agriculture (USDA), in its latest orange crop forecast for the 2010-2011 season in the US, reduced its earlier harvest estimate by 2m boxes, to 140m boxes (8.82m tonnes).

While the figure is still up from 133.7m boxes in 2009-2010, the estimate fell below market expectations. It is also below the harvest of 170.2m boxes in in 2007-2008.

"In the citrus growing areas, temperatures were predominately in the 80s during the month," the USDA said in its latest crop production report, published earlier this month. "Weather stations reported lows in the 60s and highs in the 90s this month. Drought conditions persisted with little precipitation recorded throughout May in most citrus producing areas."

The Florida citrus industry is generates $9bn annually and is responsible for around 75% of US orange juice production.

Fruit juices are just the latest household staple to be hit by a general rise in global commodity prices. Many firms this year have pointed to commodity headwinds. Aluminium, oil, apple juice and corn are all expected to double in cost in 2011.

Meanwhile, this week, agriculture ministers from the G20 nations met for the first time to discuss ways of toughening regulation on commodities trading.