Orange-juice prices dropped sharply Wednesday, on track for a third straight session of losses as consumption of juice continues to decline at a time of swelling supplies.
Frozen concentrated orange juice for July delivery lost 3% to $1.496 a pound, on track for the lowest close since May 27, 2016.
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Nielsen reported Monday that total sales of orange juice in the U.S. fell 7.6% in the four weeks ended April 15 versus the same period last year to 33.36 million gallons. So far in the 2016-2017 season, orange juice sales have dropped 7.4%, with a 9.3% fall for sales of frozen orange juice.
Rampant citrus greening disease, which causes fruit to drop before it is ripe, has devastated groves in Florida, home to the most oranges grown for U.S. juice. Last year, lower production in Florida combined with drought in Brazil, the world's largest grower, caused futures prices to rise to as high as $2.25 a pound.
This year, a recovery in Brazil's crop is expected to boost supplies beyond demand for juice, with the U.S. juice makers supplementing the meager Florida crop with supplies from Brazil and Mexico.
"If you have an adequate supply of oranges, the level of consumption comes back to the forefront. We're back to the old challenges we had before," said Joe Nikruto, senior market strategist at RJO Futures in Chicago.
In other markets, raw sugar for July was off 1.3% at 15.67 cents a pound, cocoa for July lost 1.5% to $1,778 a ton, July arabica coffee was down 0.6% at $1.3545 a pound and cotton for July delivery was down 0.3% at 79.17 cents a pound.
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(END) Dow Jones Newswires
May 03, 2017 11:23 ET (15:23 GMT)