Sui distant agri-food markets sI'm experiencing anomalies price surges of very popular products due to various reasons, from drought to plant diseases. This could also have repercussions on nearest markets and also cascading onto the shopping cart. This is the case for example of oranges, cocoa, coffee and even rice. But there are Italian products which are depopulating. Let's see in detail
Orange juice becomes a precious commodity
Last week, prices of Orange juice concentrated they achieved a new historical record. More than one commentator has referenced the film An armchair for two by John Landis with Dan Aykroyd and Eddie Murphy from 1983. But this time it's not the Duke Brothers' fault. In the film the two traders short sell 200 orange juice futures contracts expiring in April: this time in reality, in trading at the Intercontinental Exchange in New York, the price of the drink has recently reached $4,92 per pound, almost double compared to a year ago and with growth of as much as 300% compared to the end of 2021. What happened? On the one hand the climate, on the other the insects, on the other the speculators: in short, a perfect storm.
Brazil and Florida in trouble
Il Brazil, the main exporter of oranges and orange juice, expects this year's worst harvest in 36 years, due to unfavorable weather and a disease of citrus fruits called “yellow dragon” or greening bacterium. According to estimates from the citrus growers' organization, fundecitrus, South American production has shrunk by a quarter this year. Also a study of Rabobank highlights that 40% of Brazilian orange groves have been affected by the greening bacterium and the rest have been damaged by higher than average temperatures and lower production.
Also the Florida St, which was once an orange giant, has been brought to its knees by hurricanes and disease itself. And, as if that wasn't enough, it seems that they have run out of emergency supplies: usually, to avoid changes in price and taste between one season and another, they used frozen orange juice. But, after three years of poor harvests, this too is running out.
The street of the mandarin
In a report from Financial Times these days it is highlighted how the collapse of orange production will lead to a radical change in the industry of orange juice, with companies reorganizing themselves to change the recipe and replace the raw material. Since supplies of frozen juice are also running out, we are now thinking about tangerines, which grow on trees more resistant to climate change. The president of theInternational Fruit and Vegetable Association (Ifu) Kees Cools, told the FT that to deal with the orange crisis they are thinking of making the drink with "different species of fruit, which do not affect the naturalness and image of the product".
The path of the mandarin has already been traveled by Japan, which imports orange juice produced 90% from Brazilian plants, But Seven & i Holdings, owner of the 7-Eleven chain stores, has already introduced a drink based on orange and mandarins into the supply chain. In the Usa however the transition is not so immediate. To introduce this change to the US industry requires a legislative process that admits the mixture both in the UN Codex Alimentarius and by national bodies such as the Food and Drug Administration. Kees Cools made it clear that a change will be inevitable: "We have never seen anything like it, not even during big frosts and big hurricanes."
The scenario is not relevant for now Italy, where the production is mostly destined for the fresh market. “Only 25% is transformed” says Elena Albertini, vice president of Sicilian Blood Orange Consortium PGI. Coldiretti she estimates production will grow by 20% but is cautious: 60% of the oranges come from Sicily, where months of drought have reduced the fruit in size and quantity.
Cocoa still on the rise
Cocoa already last spring he had been the protagonist on the markets with strong price increases in a global market with a deficit of around 400 thousand tonnes in the 2023-2024 harvest due above all to exceptional rainfall and drought in Africa, the world's leading producer. In April, record prices increased on the London Ice market, with around 10 thousand pounds per tonne, triple that of a year ago. For the Areté company analyst Filippo Roda, consultant UnionFood on raw materials, prices exceeded the balance dictated by fundamentals. “The retention of supply, uncertainty about the climate, the blockages of the Suez Canal and the EU regulation on deforestation, speculation on the financial markets and the anomalous behavior of commercial operators weigh heavily”.
The increasingly hot cup of coffee
But now the new focus is on coffee. Between weather conditions in Brazil and the unfavorable euro-dollar exchange rate, there are price increases that could weigh on the cup of coffee loved above all by Italians: on average the price has reached 1,20 euros in Italy, according to the latest Mimit data reworked by Assoutenti. But importers and roasters are sounding a further alarm, so much so that to get to 2 euros per cup now the road is short. Only recently did quality Arabica had seen a high price on quotations, but this was balanced by falling prices on quality Robust physique. Altoga, the national roasters association, Coffee importers and food wholesalers belonging to Federgrossisti-Confcommercio, explains that in the last 6 months the coffee stock market prices Robust physique have practically doubled: they have recorded an increase of over 90% (from 2.200 to 4.195 dollars per ton), and those of the Arabica by 55% (from 155,25 to 239,85 cents per pound). Giuseppe Lavazza he is the president of the family group of the same name, the largest Italian coffee player with a turnover of 3,1 billion, but also president of the Italian Coffee Committee, the association of category businesses that is part of the Italian Food Union, he raised the alarm. “It was thought that 2024 would bring stability, but instead the sector remains overwhelmed by a perfect storm,” says Lavazza. “It is a situation never seen before” with the rise in both Arabica and Robusta, “also driven by the surge in demand from new consumers such as the Chinese” says Lavazza. “If you add to this the dollar effect, which increased by 10%, you can see how an impressive mass of costs has been unloaded on the category”.
Fears over rice sowing. Everyone is crazy about cherries and Bronte
Uncertainty also dominates the rice. Unlike a year ago, today we are faced with a global market in crisis for the Indica variety, produced mainly in Asia, and instead favorable for Japonica cultivated in the USA and EU, among others. In Italy in 2024 the expected hectares are increasing by 4%, but sowing is underway, and for Coldiretti the bad weather risks causing the estimates to be revised downwards, especially in the Pavia area, with flooded fields that are difficult to understand when they will be usable again.
In the spotlight, among others, two Italian products: le cherries and Bronte pistachio. For cherries, they are verifying the pillars of the market: decreasing production, high quality and obviously high prices, especially far from the places of production. Those who, in recent days, have tried to buy cherries, have come across prices of no less than 10 euros per kilo, often at 15 euros up to almost 20 euros. Coldiretti di Puglia, one of the regions with the highest production of cherries (in the province of Bari, 40% of the national production is cultivated, in particular between Conversano and Turi) says: “Faced with a sharp drop in production, farmers had to deal with the jump in production costs and the serious drought. With the anomalous heat of spring, the production of the prized Ferrovia cherries was more than halved with a 50%-60% drop in fruit on the trees compared to last year". The same goes for Bigarreau quality too.
The phenomenon ofthe green gold of Bronte it has taken on a national and international value, which has pushed the economic-social growth of the territories around Etna where it is cultivated. Thirty thousand tons of pistachios produced in Bronte and in the nearby Etna municipalities of Biancavilla and Adrano represent more than 85% of national production. This year the overall business of Bronte's green gold is already on 90 million euros. Bronte pistachio is the most sought after pistachio in the world and even the Chinese have focused their attention on the phenomenon of Etna's green gold, used in many areas of gastronomy and not just in pastry and ice cream making. A kilo of Bronte pistachio (shelled) on a commercial level has an average of around 40/50 euros, with peaks of over 70/80 euros.
