Orange investments increase outside SP

Cepea, July 2, 2024 – Due to the presence of greening (Huanglongbing) in São Paulo and to the recent imbalance between supply and demand for oranges, both producers and processors have been looking for options to increase the planted area in regions outside the citrus belt, without the phytosanitary risks in SP. There have been reports of new plantings in Mato Grosso, Mato Grosso do Sul, Minas Gerais (out of Triângulo Mineiro) and Goiás, areas that are not typical citrus producers.

Investments are indeed not recommended depending on the region of São Paulo state, although major processing units are located there. Many areas have high incidence of greening, which hinders new plantings. According to data from Fundecitrus, 38% of the trees in the citrus belt had symptoms of the disease in 2023, the sixth year in a row of greening increase. It is worth noting that new plants tend to be more vulnerable to the disease, increasing costs with prevention and chances of infection.

Therefore, plantings outside SP are an option. The land availability is higher, reducing costs, and there is the absence of greening and other diseases. Moreover, the industrial productivity can be higher than in SP, due to the warmer weather, which is positive for processing companies.

On the other hand, the fact that the areas are unknown for the citrus activity concerns players, since this scenario would demand adjustments in management and irrigation, which cannot be necessarily the same as those verified in SP.

Although these regions are warmer than SP (which can favor the productivity), it tends to affect the development of the trees. Additionally, costs with freight can be higher because of logistical issues.

It is worth noting that these investments in other regions are new and, therefore, they may not affect the orange supply in the short-term – it can be verified in roughly three years, when plants start producing.

MARKET – The supply of citrus fruits in the in natura market in São Paulo may be low in July. As for oranges, the lower availability has been verified since the middle of last year and it is also attributed to the high demand from the industry – it is worth noting that juice stocks at processing companies may finish the 2023/24 season (on June 30, 2024) at low levels.

Players surveyed by Cepea say that even producers who typically sell to the in natura market are focusing on sending the product to the industry this season, since prices are more attractive and there are some advantages compared to the in natura market.

(Cepea-Brazil)