Shrinking supply
pushes up citrus prices
and should improve
conditions for
surmountingdifficulties
and recovering
the sector
Inor Ag. Assmann
28
Present reality of lower production and
shrinking stocks, especially in the countries
that lead the sector of oranges and juice, is
creating a new scenario for the well-known
Brazilian citrus business. As a result of lim-
ited supply, prices are soaring significantly
and anticipate improvements in the critical
phase over the past years, where small-scale
farmers were forced to get out of the busi-
ness. However, according to analysts, there
are several structural aspects that need to
be taken into account if recovery and sus-
tainable development are to be achieved.
In their efforts to calculate the values paid,
the Center for Applied Studies on Advanced
Economics (Cepea), of the Luiz de Queiroz
College of Agriculture (Esalq), linked to the
University of São Paulo (USP), ascertained the
biggest monthly average in July 2016, since it
started the surveys, in 1994, of the sweet or-
ange in São Paulo. The 40.8-kg box sold for
R$ 20.36, up 59.3% from the same month in
2015. In august, when the season was at its
peak, prices remained unchanged, up 76%
from the average of the same month of the
previous year, or 59% in real terms.
Better remuneration yields positive re-
sults and eases the cash flow pressure of the
producers, after five consecutive crop frus-
trations, observes the team of researchers in
Cepea’s Hortifruti department, in May 2016.
Based on data from the then Agriculture
Defense Coordination Department (CDA),
New
scenario
based in São Paulo, the team ascertained that
from the first half of the year 2012 to the sec-
ond half of 2015, when prices began to re-
cede, the number of orange growing farms
dropped 36% in the State leader in produc-
tion (to 11,222 units) and the number of
plants fell 17% (to a total of 187,127,641),
with significant reflections on small and me-
dium-scale farms, while huge commercial
farms experienced some progress.
With a decrease in production and shrink-
ing stocks in Brazil, and equally in another rel-
evant production area (Florida, in the United
States), Cepea officials are spotting positive
perspectives, in terms of value, for the main
product of the sector, juice, in the internation-
al marketplace. This, in the view of the ana-
lysts, could give rise to a new economic cycle
in the crop. However, to sustain itself, they see
the need for the sector to face a series of struc-
tural challenges. They cite indebtedness prob-
lems, higher production costs, outbreaks of
the greening disease (HLB) and other diseas-
es, inequalities in the price of a box of orang-
es, the establishment of industrial orchards,
adverse weather conditions and productivity.
Researchers advise those farmers who
continue in the citrus business about the rel-
evance in settling their debts as soon as pos-
sible, so as to recover their investment capaci-
ty in a positive scenario. In themeantime, they
suggest a more diversified business model,
control over the greening disease, and remu-
neration that contemplates the distribution of
the income. Bigger challenges, they insist, nor-
mally affect small and medium-size farmers,
who, because of individual or collective initia-
tives, need to reduce the risks of the activity.
