Commodity Fundamentals: How to Trade the Precious Metals, Energy, Grain, and Tropical Commodity Markets

CHAPTER 19

Orange Juice

OVERVIEW

Oranges are technically a kind of berry and originated in India, where the orange, called na rangi, was bitter. The Indian orange was one of three major varieties of oranges: sweet oranges, sour oranges, and mandarin oranges.

Today, growers produce millions of tons of sweet oranges annually for commercial consumption, including Hamlin, Jaffa, navel, Pineapple, and Valencia oranges. Sour oranges are used for commercial consumption as well, but primarily for marmalade and in liqueurs.

Like cocoa and coffee, orange production has to be planned years in advance. It requires an extended development time and long-term commitments of land and labor. Oranges come from semitropical, nondeciduous trees that take about 3 to 5 years to bear fruit and 15 to 20 years to reach peak production. Groves are productive for 60 to 70 years; but productivity begins to decline after trees reach 30 years of age.

Even after a grove is established, producers remain vulnerable to a variety of potential price shocks. The number of trees bearing fruit, the ages of the trees, the fruit yield per tree, the size of the fruit, fruit droppage, the juice yield per orange, and loss of trees due to weather or disease can all be important factors in determining a grove's yield and the prices that its oranges will command.

Raw oranges mature in Florida over a nine-month period, commencing in September and lasting through May. Early and midseason oranges mature between September and ...