Price of orange juice hits record high

Published:  13 Jan at 9 AM

The price of orange juice has hit record levels in the past few days due to fears that contamination may have affected supplies coming from Brazil, the world’s largest producer. The Food and Drug Administration in the US said that the fungicide carbendazim had been detected in some of the shipments coming from the South American country.

Since the start of the year, the price of orange juice has rocketed by around 25 per cent. Use of the fungicide is illegal in the US, but its use is permitted in Brazil. The FDA said that low levels of carbendazim did not pose a significant risk to health, but added that any shipments containing the chemical would not be allowed onto American soil.

According to figures released by the Department of Agriculture in the US, Brazil was responsible for supplying more than half of the orange juice consumed around the globe in 2010-2011. The second largest supplier is Florida, which has been having problems with frost in recent days.

According to the BBC, some of the fruit and tree leaves have been damaged by cold weather. T&K Futures and Options president Michael Smith said there was the potential for a global shortage. He added that the below zero temperatures in Florida were certain to cause damage to the fruit.

According to analysts, because the orange juice market is not as large as commodities such as cocoa and coffee, prices can shift significantly over short periods. However, a rise to $2.12 per pound is said to be quite dramatic.