by Dan Vallada FoodBizDaily.com Bureau Sao Paulo
October 29 2009 - Orange juice futures may rise about 6% over the next 18 months due to the plague that infects orange groves in Florida, the world’s second largest orange producer "said Kenneth Geld, CEO of Louis Dreyfus Commodities in Brazil.
"Prices may rise to U$1.25 a pound," said Geld in an interview in São Paulo. Orange juice for January delivery rose 1.7% to U$1.174 a pound on ICE Futures U.S. -a leading regulated U.S. futures exchange for global agricultural- yesterday in New York, and recovery was approximately 73% this year. Louis Dreyfus is one of the world's three largest orange juice processors.
The U.S. Department of Agriculture said on October 9 that Florida will produce 136 million boxes (of 40.8 kilograms) of the orange in the crop that just begun, volume below the 162.4 million boxes of the previous harvest.
"The citrus-greening situation is very worrying and can increase orange juice prices in the next 6 to 18 months," said Geld. Low temperatures in Florida and growing global demand will also contribute to higher prices, he said. The orange crop in Florida runs from October 1 through January.
Louis Dreyfus Commodities account for more than 15% of global orange juice production according to its website. The company, with facilities in Florida and Brazil produces 83 million boxes of oranges and 330 thousand tons of juice per year. Brazil is the world's largest producer of orange juice.
According to Geld, Louis Dreyfus is expanding in Brazil to reduce its reliance on independent producers.
The production of their own farms will cover 40% of its needs in Brazil within five years as trees mature compared to about 15% of needs met today. The company processes about 60 million boxes of oranges a year in Brazil.
"We have never invested so much in the Brazilian operation as we did in the past three years," he said, not specifying the amount being spent by Louis Dreyfus in the expansion.
"The company is studying the possibility of expand groves in Brazil by 15% to 35,000 hectares over the next two years. The production costs would be lower than in Florida," said Geld.
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Louis Dreyfus Commodities B.V.
Address: Westblaak 92, 3rd Fl. Rotterdam, 3012 KM The Netherlands
Telephone: +31-10-411-0480
Fax: +31-10-413-0432
About Louis Dreyfus Commodities B.V.
An affiliate of global conglomerate Louis Dreyfus Group, Louis Dreyfus Commodities (aka LDCommodities) buys, sells, and trades bulk commodities in more than 50 countries. It is one of the world's largest merchants, traders, and distributors of grains, oilseeds, coffee, cotton, and orange juice. It also handles rice, sugar, metals, and bulk ocean freight, and is making inroads in biofuels and financial trading markets. To support its activities, the company owns and operates ports, processing plants, and other infrastructure. Louis Dreyfus Commodities traces its roots to 1851.