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Orange Juice Futures: Demand

Consumption Considerations

The demand for Orange Juice on a large scale did not begin until after World War II following the development of the industrial process of producing concentrate. From the late 1940's until the mid 1960's Florida was the only major producer of Orange Juice and the United States was the only major consumer of Orange Juice. However, following the Florida freeze of 1962, production in Sao Paulo began. Because Brazil had historically been the provider of fresh oranges to Europe since the 1920's, the advent of juice production in Brazil lead to increasing exports of Orange Juice. A world market for it soon followed.

The United States is still the largest consumer of Orange Juice, accounting for half the world’s annual Orange Juice consumption. Future demand in the United States is not expected to grow much, as this is a relatively mature market. US demand should vary along traditional macro economic factors, such as income, population and consumer tastes.

European demand is very segmented. Germany is the largest consumer with in Europe, followed by Britain and France. These countries too are relatively mature markets. However, Eastern Europe and Russia have been experiencing increasing Orange Juice consumption in recent years, a trend which should be greatly affected by the state of their economies, since Orange Juice is considered a luxury item in many of these locals. Any increase in income levels, should be matched by increases in Orange Juice consumption on a relative basis.

Japan, South Korea, and Australia are significant sources of demand for Orange Juice. Australia is considered an almost mature market with a relatively high per capita consumption. Other countries in Asia, including Hong Kong, Thailand, and Taiwan have relatively low per capita consumption.

Like other agricultural products, the demand for frozen concentrated Orange Juice is affected by large macro trends such as income levels, consumer tastes, and population growth rates. The major consuming countries of frozen concentrated Orange Juice are the United States, England, Canada, and Europe. The growing affluence of South American and other developing countries will also be major forces effecting the demand for oranges and frozen concentrated orange juice.

The Florida Citrus Association is probably the best source of information on the demand for frozen concentrated Orange Juice. This Association releases the statistics on the movement of frozen concentrated Orange Juice pack from Florida to wholesalers, super- market chains, and other manufacturers of food products. The federal school lunch program and other federally sponsored food programs can have a large effect on the demand for frozen concentrated Orange Juice. US Exports of frozen concentrated Orange Juice are another excellent source of information on demand.

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