Orange Juice Prices Reach Six-Year High

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The New York Sun

Orange juice prices rose, extending a rally to a six-year high, as Hurricane Wilma veered closer to a direct hit on orange groves in Florida, the world’s second-biggest grower after Brazil.


Wilma, now a Category 5 storm with winds as high as 175 mph, is heading north, moving closer to citrus groves than Tuesday, according toIntellicast.com. Orange juice prices have climbed 32% in the past year as three hurricanes in 2004 reduced Florida’s output by 38%.


“All of Southwest Florida groves are at risk,” the director of fruit procurement at Southern Gardens Citrus in the southwest part of the state in Clewiston, Ronald Oakley Jr., said. “A weather event like Wilma would be devastating to the industry,” he said. Southern Gardens has 32,000 acres of groves in Florida.


Orange juice futures for November delivery rose 2.9 cents, or 2.7%, to $1.118 a pound on the New York Board of Trade. Prices have been at the highest since December 1998 since Tuesday, and gained 5.2% over the past two days. A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.


“There’s nothing anybody can do” to minimize potential damage, the U.S. Department of Agriculture’s administrator of citrus statistics in Orlando, Florida, Bob Terry, said. “The wind is the problem.” Last year’s hurricanes also damaged some storage tanks, where inventories are down 30% in the past year. Florida’s orange crop last year was 149.6 million boxes, the smallest in 13 years and down from 242 million a year earlier. A box weighs 90 pounds.


Wilma has moved north since yesterday, on a track that may take it over Lake Okeechobee into Fort Pierce, Mr. Terry said. “Any track that goes further north takes it more and more” into citrus groves, he said. The brunt may be felt this weekend, he said.


Brazil is the world’s biggest grower of oranges.


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