Orange Juice Futures Surge as U.S. supplies reduced by citrus greening disease

Orange juice futures surged to a record on mounting concern that U.S. supplies may be reduced by citrus-greening disease in Texas and a slowdown in imports as the government tests for a banned fungicide.

Texas confirmed a case of citrus greening on Jan. 18. The disease has caused extensive damage to crops in Florida, the world’s second-biggest grower. On Jan. 9, the U.S. Food and Drug Administration detained juice imports to check for carbendazim, a fungicide used on fruit in Brazil, the top producer. The chemical was linked to liver tumors in animals.

“Citrus greening in Texas and the fungicide issue” are driving the rally, Sterling Smith, an analyst at Country Hedging Inc. in St. Paul, Minnesota, said in a telephone interview. The crop disease “always makes the markets nervous because the methods used to deal with it tend to be pretty draconian,” including tree removal, he said.

On ICE Futures U.S. in New York, orange juice for March delivery climbed by the exchange limit of 10 cents, or 5 percent, to a settle at $2.1065 a pound, the highest ever. The price has surged 25 percent in January, heading for the biggest monthly rally since October 2009. The previous all-time high for a most-active contract was $2.094 on Dec. 7, 2006.

Higher prices may boost costs for companies including PepsiCo (PEP) Inc., the maker of Tropicana, and Coca-Cola Co. (KO), which sells the Minute Maid and Simply Orange brands.

The retail cost of orange juice rose 12 percent in December from a year earlier, according to data from the U.S. Labor Department.

“We are in unchartered waters, with what can take place in Brazil,” James Cordier, the founder and president of Optionsellers.com, said in a telephone interview from Tampa, Florida. “Citrus greening is one more thing that we didn’t need.” Prices may rise as high as $2.50, he said.

The FDA said today that 19 samples of imported juice since Jan. 4 haven’t shown any dangerous levels of carbendazim, while 26 still await analysis.

Agriculture in Texas was ravaged last year by the worst drought in at least a century, while a frost hit the state’s citrus groves in mid-February, reducing output, according to Ray Prewett, the president of Texas Citrus Mutual.

The current crop has not been affected by citrus greening, he said today in a telephone interview. About 75 percent of output is used as fresh fruit and the remainder for orange juice, he said. Texas is the third-largest U.S. grower, after Florida and California.

The main citrus-growing region in California faced freezing weather yesterday and on Jan. 17, Donald Keeney, a senior agricultural meteorologist at MDA Information Systems Inc., said today in an e-mail. Temperatures will be higher the rest of this week, posing no immediate risk of frost, he said.

“California oranges are table oranges and not normally used for juice,” Country Hedging’s Smith said.

On Jan. 12, the U.S. Department of Agriculture cut by 2 percent its forecast for Florida’s crop this season as a dry spell hurt fruit size.

Stockpiles of frozen orange juice monitored by ICE have tumbled 65 percent to 22.8 million pounds (10,335 metric tons) from a year earlier, exchange data show.

Cotton Prices Fall Orange Juice Rose on trim commodity Demand

Commodity cotton fell the most in more than eight weeks on concern that Europe?s debt crisis will slow global growth and trim commodity demand.Orange juice rose. Orange-juice futures for January delivery advanced 1.8 percent to $1.7185 a pound in New York, the biggest gain since Oct. 24. The commodity has advanced 13 percent in the past year.

The Standard & Poor?s GSCI Index of 24 raw materials fell as much as 3.2 percent as European borrowing costs surged amid mounting concern the region?s leaders will fail to stem fiscal woes. World cotton demand will be 1.7 percent lower than forecast last month, leaving a ?massive? surplus of more than 3.5 million metric tons, according to Cotlook Ltd., a research company in Birkenhead, England.

?The world?s going to have enough cotton to meet its demands,? John Flanagan, the president of Flanagan Trading Corp. in Fuquay-Varina, North Carolina, said in a telephone interview. ?Demand is slow because of the economic situation in the U.S. and Europe.?

Cotton for March delivery declined by the exchange?s 4-cent limit, or 4 percent, to settle at 96.48 cents a pound at 2:46 p.m. on ICE Futures U.S. in New York, marking the biggest loss since Sept. 19.

The fiber has tumbled 56 percent from a record $2.197 on March 7. A bale weighs 480 pounds (218 kilograms)

?The commercial sector is still ailing, as evidenced by the complete lack of demand outside of China,? Andy Ryan, a senior-risk management consultant at INTL FCStone Inc. in Nashville, Tennessee, said in a report.

Inventories of frozen orange juice monitored by ICE have dropped 59 percent to 24.4 million pounds from a year earlier, exchange data show. ?Supplies have been a little tight,? Jack Scoville, a vice president at Price Futures Group in Chicago, said in a telephone interview.

ADFSC Target Local Production Fruit and Vegetable 40 percent 2015

Abu Dhabi Farmer?s Services Centre (ADFSC) targets to achieve a 40 per cent presence of locally-produced fruits and vegetables in the markets of the Emirate by 2015 and reduce 40 per cent water consumption by 2013.

This was stated by Khalifa Al Ali, Managing Director and Board Member of FSC, while officially launching Zera?atona (Our agriculture) campaign, which aims to bring centrestage the sustainable agriculture strategy in line withAbu Dhabi?s 2030 Vision.

There are around 24,000 farms in the emirate of which around 8,500 farms are in the Western Region, some 12,000 in Al Ain and about 3,000 inAbu Dhabi.

Talking to Khaleej Times, Al Ali said: ?Our target today is to obtain at least 40 per cent of the local produce to be presented in the local markets of the Emirate by 2015. Currently we can say that the presence of local tomato, potato and other local vegetable for example is very high during the cropping season and it represents 70 per cent in the market. But round the year we want a 40 per cent representation.?

The production of these two vegetables is gradually growing. However, the production of other crops is comparatively less as farmers are using different techniques of production for generating more monetary benefits and due to awareness deficiency, Al Ali added.

?But we are trying to convince them to use better technology to reduce the water consumption, he said.

The farmers in the Emirate are currently producing 10 to 15 types of vegetables successfully, while fruits are grown in cultivated areas only which include mango, strawberry, apples and others, Al Ali said. According to the ADFSC, the total quantity of sales for June 2010 to June 2011 cropping season is 16,790,829 kilos (locally-produced vegetable and fruits), while the total value of sales for the same cropping season is Dh12,402,658.

Zera?atona campaignThe Abu Dhabi Food Control Authority (ADFCA) together with the Farmers? Services Center (FSC) launched Zera?atona (?our agriculture?) campaign.In a Press conference recently, ADFCA and FSC highlighted the need for furthering and implementing initiatives to fuel the agriculture sector in the Emirate.

The campaign seeks to ensure economic diversification and agricultural sustainability through preserving vital natural resources, motivating farmers to adopt state-of-the-art technologies and promoting local produce.

ADFCA?s Agricultural Affairs Sector will have a legislative and monitoring role alongside managing and streamlining government support programmes emirate-wide with a view to make farming more sustainable and lucrative.

FSC will provide agricultural services and strengthen awareness, besides helping farmers market their produce according to the best practices and line withAbu Dhabi?s agricultural sustainability plans outlined in ADFCA?s strategies.

Mohammad Jalal Al Reyaysa, Director of Communications and Community Services at ADFCA, said, creating awareness about the importance of sustainable development is crucial to the success of our efforts.

?In order to reap the fruits of this campaign, farmers play an integral role in promoting locally-grown produce and raising its competitive edge in line with Abu Dhabi 2030 Vision. ADFCA and FSC are committed to providing all means deemed essential to support the farmers to achieve the goals. We will also encourage the farmers to cultivate crops that are high in demand,? Al Reyaysa said.

Fruit and Vegetable Price Rise, Food Price Index

Fruit and vegetable prices continue to rise, stinging Kiwi families by almost 16 per cent more than a year ago. Statistics New Zealand's latest Food Price Index, released today, shows that food prices are more expensive across the board than a year ago.

For six straight months the price of fruit and vegetables has continued to grow. They rose 8.9 per cent between the winter months of June and July. Restaurant food and ready to eat meals were the least offenders - up 4.2 per cent over the year.

Statistics NZ's "food basket" - a representative food buy updated every three years to reflect what New Zealanders are buying - added four new items this year.

Dried apricots, frozen berries, frozen chicken nuggets, and flat breads such as tortillas are now on the list. Nothing was dropped. Since June 2008, we now buy more fruit and vegetables and soft drinks, but less meat, poultry, and fish.

Fruit Commodity and Vegertable Prices High, Food Prices Rose in Mid 2011

Food prices rose in June in New Zealand, as higher fruit and vegetable prices offset lower meat prices, according to official data released on Wednesday.

The food price index rose 1.4 percent last month, to be 7.5 percent higher than a year ago, Statistics New Zealand said.

The annual increase also reflects a rise in the government sales tax last October, which has added 2.2 percentage points.

The food price index makes up 17.4 percent of the consumer price index.