The global orange juice supply is in crisis, but does this offer new opportunities for Australian producers?
According to the US Department of Agriculture (USDA), global orange production for 2023/24 equated to 48.8 million tonnes.
Due to damaging weather conditions, such as dry and unusually warm summer heat, orange production in Brazil – the world’s largest citrus producer – is predicted to drop by 173,000 tonnes to a total of 16.5 million over the coming year, while growers in Europe will see a decline of 89,000 tonnes. However, this may be met with a reduced demand in these regions. Brazil’s production has suffered due to heat stress during the crop’s flowering period and the spread of citrus greening disease.
Interestingly, these weather conditions have seen a spike in the price of orange juice concentrate, created when all the excess water is removed from oranges before the remaining product is compressed and frozen for easy transportation. The concentrate is cheaper than typical orange juice, meaning it is a major ingredient in vitamins, cosmetics and drink blends. Yet with supply dwindling and prices increasing, we could see disruptions across several other products and industries.
A citrus farm in NSW © Hillston Citrus 2014
Australia’s orange industry
The USDA predicts that Australia’s orange production will increase by 5 percent to a total of 530,000 tonnes in the next year.
The Riverina, located in southern New South Wales, is the largest orange growing region in the country, accounting for 30 percent of all production. There are approximately 8,510 hectares of planted citrus in the Riverina, including oranges, grapefruits, lemons and limes, with the Valencia orange making up 50 percent of production.
Despite this growing industry, Australia still receives over 14,000 tonnes of orange juice through imports every year. Around 80 percent of this supply comes from Brazil, with another 10 percent from Israel, according to Citrus Australia.
Yet, with Brazil’s production declining, now could be a great time for Aussie growers looking to expand their businesses. Increasing production to meet domestic needs, as well as filling the growing hole in exportation, could see Australia’s industry boom.
However, according to a parliamentary committee inquiry into issues facing the Australian citrus industry, unfair competition from imported goods and rising production costs are still major challenges impeding the growth of domestic businesses.
The report states that “there have been general increases to costs such as chemicals, packaging, fuel and freight. However, it has been significant increases to the cost of labour, electricity and water which have been having a major impact on growers’ ability to compete.”
Rising labour costs, coupled with inadequate supermarket prices, means farmers are finding little or no incentive to plant these crops on their land.
Citrus support
In order to meet the current demand brought about by global orange shortages, Australia’s citrus industry must be properly supported.
Australia is already one of Japan’s biggest orange suppliers, and there are new export opportunities presenting themselves. With imports declining, growers may have more bargaining power with supermarkets, and more clients looking to purchase home-grown oranges.
According to the parliamentary committee inquiry report, Australia’s best opportunities for growth comes from finding new export markets.
Organisations are “currently working toward the development of increased exports to Asia and increasing market share in China, South Korea and Thailand,” states the report.
“The committee supports the increased efforts being made by the industry in relation to market access planning, market improvement, and market development.”
To read about the potential of Australia’s pomegranate industry, click here.