BULLETIN MNS December 2009

FRUIT JUICES
MARKET NEWS SERVICE (MNS)
QUARTERLY EDITION

Disclaimer
This report has been prepared without formal editing, as a service to exporters and industries in developing countries by the Market News Service (MNS), Division of Market Development, International Trade Centre. The Joint Agency of the World Trade Organization and the United Nations. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without prior permission in writing from the International Trade Centre. The mention of specific companies or of certain commercial products and brand names does not imply that they are endorsed or recommended by ITC in preference to others of a similar nature that are not mentioned. The designations employed and the presentation of material on the map do not imply the expression of any opinion whatsoever on the part of the International Trade Centre concerning the legal status of any Country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

Market News Service

Report prepared for ITCs Market News Service by: Mr. Charles Barkla (barklaconsult@hotmail.com) Issue No. 4, of December 2009

Fruit Juices

Again we want to thank our subscribers and correspondents who were kind enough to comment on our last report. We appreciate all feedback, as it gives us the opportunity to develop and adapt the report to your needs. We also want to repeat our request for ideas and contributions that relate to matters concerning sub-Saharan Africa. For this edition we have again included more market and company news, especially from Africa. We want to reiterate that prices in our report are effectively already out of date by the time we go to print. They should not be used as a precise means of setting prices, but regarded as indicators of trends. Our objective is to identify trends in supply and demand and their effects on long term market and sector dynamics. This trend identification is designed to help in planting, processing and marketing decisions. They were collected during weeks 50 & 51 of 2009. We want to thank subscribers for their comments on the new juices introduced in recent editions. We appreciate both the time and encouragement that we received following our requests for comments. We have reintroduced apricot puree for this edition. We gratefully acknowledge the kind support and funding that we receive from the Dutch government agency, the CBI. http://www.cbi.eu/marketinfo This is the Centre for the Promotion of Imports from Developing Countries. We particularly appreciated their report into the EU market for Fruit Juices, which was published in January 2009. They kindly refer to our newsletter and we wish to reciprocate by referring our readers to their reports. In our last issue, we included pomegranate juice. This was reintroduced as a direct result of an expression of interest by a reader. We welcome this feedback and wish to hear if there are further products that readers would find useful for us to follow. In response to requests for more industry and company comment, we have increased our coverage in this issue. Companies which would like to have their activities featured in our newsletter could let us know by email, telephone, mail or fax to the addresses below. Thank you in advance.

For these purposes or for other information about the report and the Market News Service, please contact mns@intracen.org or visit www.intracen.org/mns The Market News Service is made available free of charge to all Trade Support Institutions and enterprises in Sub-Saharan African countries under a joint programme of the International Trade Centre and CBI, the Dutch Centre for the Promotion of Imports from Developing Countries (www.cbi.nl). Copyright MNS/ITC 2000. All rights reserved To subscribe to the report or to access MNS reports directly online, please contact mns@intracen.org or visit our website at: http://www.intracen.org/mns

1 Market News Service Fruit Juices

Index
INDEX ............................................................................................................................. 2 OVERVIEW .................................................................................................................... 3 INDUSTRY AND MARKET NEWS ............................................................................... 4 ACE/Acerola ................................................................................................................ 7 APR/Apricot ................................................................................................................. 7 BAN/Banana ................................................................................................................ 7 GRA/Grapefruit ............................................................................................................ 7 LEM/Lemon ................................................................................................................. 8 LIM/Lime ...................................................................................................................... 9 MANG/Mango .............................................................................................................. 9 ORA/Orange ................................................................................................................ 9 PAP/Papaya .............................................................................................................. 12 PAS/Passion Fruit ..................................................................................................... 12 PIN/Pineapple............................................................................................................ 13 PEA/Peach ................................................................................................................ 13 POM/Pomegranate.................................................................................................... 14

2 Market News Service Fruit Juices

Overview
Since our last MNS Fruit Juice report was written only less than two months ago, some may assume that maybe not much has changed. However, some significant movements have been noted concerning various juices in this report. Steady and encouraging price rises are taking place in FCOJ and grapefruit juice. This comes after a long spell of depressed prices for both types of juice. However, they are happening under very different scenarios. It is apparent that estimates for future production of orange juice in all its forms have been revised downwards. Problems with tree disease and the long time that it takes to replace orange groves makes the chance of increased production as far ahead as the next five years, slim. For grapefruit, reduced demand continues but supply has gone down by even more. Storm damage and low prices have worked their magic over the past three years to bring production down below the present average consumption levels. The other very significant factor has been the continuing weakness of the US Dollar. In particular against the Brazilian Rial (B.R), the US currency has effectively devalued by nearly 30% over the past year. Against the Euro, it has dropped by over 15% since March 2009. This makes juices and purees from these currency zones relatively expensive, when they are compared to production from US dollar trading zones. The jury is still out concerning the short term future for the world economy. A consensus seems to be forming around a second dip in activity but there seems to be general agreement that any recovery will be patchy. Some sectors will do much better than others. The food and beverage sector seems to be performing well, perhaps due to the obvious need that this sector fills. We are seeing evidence of down trading in many parts of the world and in several juices. The US market continues to buy more juice, but expenditure there has only just started to rise in the past month. In Russia and Eastern Europe, there has been a noticeable shift to weaker nectars away from pure juice formulations. Additionally, there has been a marked rise in house brand sales. If this situation were to continue, we could be looking at slower market development and reduced new product launches. If more shelf space is devoted to house brands and weaker drinks, it can be difficult to introduce new lines. This can turn into a vicious downward spiral, where more volume is consumed for decreasing returns. On a more positive note, it is pleasing to see the pineapple, mango and banana juice/puree businesses return to a better balance between supply and demand which has given more stability to prices. Even with passion fruit juice there has been a significant drop from the unaffordable prices which prevailed only a few months ago. A period of relative stability could be very positive for all participants in the juice business. There are quite enough risks elsewhere to make life difficult. We would like to wish all our readers a happy and peaceful Christmas and a very successful 2010.

3 Market News Service Fruit Juices

Industry and Market News

OJSC Unimilk Company, one of Russia's leading dairy producers, is launching a new line of dairy products under the Smeshariki brand. The new line comprises milk shakes, sterilised milk, drinking yogurts, as well as juices and fruit drinks. Most will be made at the company's factory in St Petersburg. DEL Monte Philippines is launching a new pineapple juice, Del Monte Heart Smart Pineapple Juice, containing Reducol, a proprietary cholesterol-lowering ingredient designed by Canadian nutraceuticals company Forbes Medi-Tech Inc. Reducol is an ingredient containing plant sterols and stanols, otherwise known as phytosterols, which have been clinically proven to significantly lower 'bad' cholesterol, Forbes says. Reducol has already been used in a variety of foods, including yogurts, yogurt drinks, processed cheese, milk drinks and spreads. The beverage will be packaged in 240ml single serve cans containing 1g of Reducol. ZUEGG, a large Italian fruit juice processor, has invested over 25 million in a plant in Russia's Kaluga region, according to local media reports. This will be its sixth plant, as it already has two in Italy, two in Germany and one in France. It is scheduled to come on stream in February-March 2010 and will make fruit preparations for the dairy and confectionery industries, including companies such as Danone, Campina and Unimilk. The production capacity of the site is 24 000 tonnes of finished products per year. KENYA-based Haco Industries, a personal care and hygiene product company, will diversify into the baby food market, producing cereals, fruit juices and canned food. Initially these will be imported through South African parent company Tiger Brands, but Haco hopes to begin processing locally as well. The market for baby food in Kenya, though growing, is still small, and Haco will be in competition with firms like Proctor and Allan and Cow & Gate, and Nestl Foods Kenya, which controls 45% of the baby food market through its Cerelac brand. Tiger Brands hopes to use Haco to penetrate the East African market. AUSTRALIAN juice company Sunraysia has re-launched its brand and unveiled four new flavours. The new 'Pick of the Crop' range will include Pineapple, Australian Mango and 4 Market News Service Fruit Juices Tropical Delight, while the 'Delicious Healthy Top Ups' range will include a new Blueberry juice, adding to the existing Prune and Cranberry drinks. CERES Beverages, South Africa's biggest fruit juice company and Pepsi distributor, has seen full-year revenues and profit margins hit by a combination of the decline in consumer spending in the country and higher costs, its parent company Pioneer Foods has said. Fruit juices sales were higher, thanks to a doubledigit increase in export volumes and Ceres has started work on a fifth juice factory in Wadeville that will expand capacity and serve the local area. ECKES-Granini has agreed to buy, for an undisclosed sum, the 49% stake in its Spanish subsidiary that has been owned by Spanish brewer Damm since its formation in 2003. Under terms of the deal, Damm will continue to distribute Granini juices and juices in the hotel and foodservice channel in Spain for a further five years. Spain is Granini's biggest market, where it is available in 25 flavours and in 2008 enjoyed sales of 48 million litres, giving it a leading 13% share of the Spanish juice market. It is bottled under contract by Riha. TETRA Pak has launched a new Tetra Therm Aseptic Visco unit, for high viscous and particulate products such as tomato paste, vegetable and fruit pures, baby foods and sauces. It is claimed to cut product losses by up to 50%, improve production flexibility, and maximise food safety thanks to an innovative new heat exchanger. INDIA's Parle Agro has seen a 60% boost in sales of its Saint fruit juice after new television adverts showed off the product. Although Saint was launched in the second half of 2008, rollout of the product has been slow. Nadia Chauhan, director of Parle Agro, said: "We are not looking at the wholesale market. We believe in direct retail and feel that Saint is a product that requires a steady and well thought out rollout as it is a niche product." Saint's one litre packs are priced between INR 95.0- 100.0 (US$2.0-2.1) and 200ml packs between INR 2.0-22.0

BIOFRESH, the Greek orange juice company, has announced plans to add a bottling plant to its factory in Sparta. The plant will operate under the name of Freshland, a new company. The 13 million (including 7.5 million of government support) facility will be able to bottle up to 60 million litres of NFC orange juice annually, in PET packaging. It will also pack reconstituted orange juice for local markets. Construction will begin next year, once the necessary environmental and building permits have been obtained, and it is hoped that the plant will be completed in late 2010, in time for the 2011 season. THE Brazilian Regional Development Bank for the Extreme South (BRDE) and the agricultural co-operative, Co-operativa Integrada have launched a new credit line for financing the founding of orange groves. The co-operative wants to set up 5 000 hectares of orange groves in Brazil's Paran state. These will supply a new juice industry, to start operations in Ura, northern Paran, in 2012. "The investment amounts to BRL35 million (US$20.21 million) and the plant will have a fruit pressing capacity of three million boxes a year," said Integrada director, Srgio Otaguiri. ANGOLAN firm, Admar Damiao, has announced its plans to invest around US$4 million in building a factory to process fruit and vegetables in the country's Huila province. Paula Baptista, the provincial director for industry, told the Angop news agency that the project, located around 45 km from the city of Lubango, aimed to prevent agricultural products from the region perishing due to a lack of distribution. Although she did not give details on production capacity, Baptista said the factory would produce fruit and vegetable juices, fruit pulp and canned fruit and vegetables. UK JUICE and soft drinks maker Britvic has announced that its net profit for the year ended 27 September rose 47% to UK46.8 million (US$77.6 million), helped by volume gains for its core brands in the UK, lower taxes and oneoff charges. Total sales for the year rose 5.6% to UK978.8 million. UK and international growth more than offset a decline in Ireland. THE US Booster Juice smoothie chain, Booster Juice, plans to add three new outlets in India to its existing estate of seven shops (six in Bangalore and one in New Delhi). The new shops will be in Chennai, Bangalore and

Delhi. Brand Calculus is India's official Booster Juice franchising company in India. The chain sells juices and smoothies priced between INR39-119 (US$0.85-2.58). CITRUS Farmers in Ghana are keen to install a fruit processing facility in the Akuapem South Municipality to save them from post harvest losses, reports the Ghana Broadcasting Corporation. At present, if producers fail to sell all their oranges during harvest time, they have to leave them to rot. The Regional Coordinating Council will be involved in promoting the establishment of small-scale farm gate fruit processing units. Farmers will then be able to sell their oranges and mango juice locally. The council warned that due to the seasonal nature of fruit production coupled with farm sizes and productivity levels, large scale processing was often quite difficult to undertake. SKYPEOPLE, a Chinese processor and manufacturer of concentrated apple, kiwifruit, pear and other fruit juices and fruit products, has announced its results for the third quarter ended 30 September, 2009. Profits increased 76.8% year-over-year to US$2.9 million on sales of US$10.6 million. PEPSICO has announced the start of licensed production of Privet juices in Belarus. It acquired the brand when it bought Russian juice producer Lebedyansky last year. According to Russian media, Privet will be copacked by ODL Firma ABC, in the city of Grodno. At present, the Belarus company has four Tetra Pak lines allowing it to produce 65 000 tonnes of juices annually. It holds 6% of the total Belarusian juice market. PepsiCo has also announced that it is planning to start bottling other well-known Russian brands in Belarus in the near future, such as Fructovy Sad and Ya. THE directive issued by the Kenya Bureau of Standards (KEBS) giving juice manufacturers a deadline of April 2009 to stop using pictures of fruits on juice packages that contained little or no fruit has not been effective and such juices are still in the market due to corporate lobbying and a definite lack of government enforcement. Juice makers have, since the ban, engaged the government, arguing that the new requirement was drafted hastily and that it will hurt the juice industry.

5 Market News Service Fruit Juices

COCA-Cola Spain has launched Burn con Zumo, the company's first energy drink combined with fruit juice in Europe. It is said to contain 37% less caffeine than normal Burn and around 20% fruit juice. Available in a 250ml can format, Burn con Zumo will be sold in "modern" foodstores and service stations. CHIQUITA is planning to extend its new Fruit Bar retail format with the addition of at least 12 new stores across Europe. The company presently has 13, operated under franchise agreements, in Germany, Belgium and Switzerland. Chiquita is now especially targeting Italy, where its Frullatti 10 e Lode smoothies have already enjoyed some success. As well as smoothies, milkshakes, juices and yogurts, the bars also sell Chiquitabranded fresh-cut produce including salads and fruit salad. INNOCENT, the UK smoothies company, plunged into the red last year due to falling sales and an ambitious European expansion plan. The company made a pre-tax loss of UK11.2 million for the year ending 31 December, compared with a profit of UK12.1 million in 2007. Turnover fell to UK99 million from UK112 million. Administrative costs doubled to UK22 million, reflecting the UK12 million invested in expanding into the European continent, and exceptional costs also rose because of a redundancy programme. Jon Wright, one of the company's three founders, said that 2008 was "a challenging year for the company", but added that the underlying UK business remained profitable.

PEACE River Citrus Products Inc of Florida has bought A Duda & Sons' FCOJ and other juice related retail, foodservice and contract packaging business at Duda's Citrus Belle plant in LaBelle. Duda packs juice products for private label customers, foodservice distributors, and also provides juice packaging services for major US juice brands. Peace River produces over 120 million gallons of orange and grapefruit juice per year, and is in the process of doubling its NFC juice storage capacity. It also supplies bulk concentrate and NFC juices to both the largest brands and to private label distributors. A PHILIPPINES co-operative is planning to establish a pineapple juice packing plant to produce juices in pouches and PET bottles for the domestic market. The Labo Progressive Multi Purpose Co-operative (LPMPC) in Camarines Norte is also aiming to export fresh Queen pineapples to South Korea. Its fruit is presently used by third parties to make juices and dehydrated pineapple. SUNMAGIC, a UK supplier of 100% pure fruit juices, smoothies and juice drinks, has developed an exclusive pack for cash and carry outlets. The one-litre 100% pure orange juice Flash Pack will be available until the end of the year and again from April 2010. The one-litre range also includes 100% pure apple, 100% pure pineapple, 100% pure grapefruit, 99% tomato juice and a cranberry juice. Sunmagic has also launched a new PET pack. The new six x 330ml cranberry juice drink complements the existing 330ml 100% pure orange juice and 100% pure apple juice.

Source: Foodnews LACNOR, a leading name in the UAE fruit juices and dairy industry and part of National Food Products Company, has made a strategic addition to its product portfolio with the launch of a new short life fruit juice, Lacnor Fresh. The move is expected to provide a further impetus to its market leadership in the Source: news.alibaba.com

juice category which showed a robust growth of 16 per cent last year and is currently estimated to be valued at Dh1 billion. The range is targeted at the fast growing segment of health conscious consumers who are looking for more natural and healthy options without compromising on taste.

6 Market News Service Fruit Juices

ACE/Acerola
Prices
Brazil, frozen ss, 6-8 brix, US$800-1150/mt FOB Santos Brazil, frozen concentrate, 18 brix, US$4100/kg FOB Santos

Market Situation
Prices are coming down quite fast for this product. Some of our contacts suggest that demand is slowing up. There seems to be no shortage of acerola in all its forms at the time of writing.

APR/Apricot
Prices
Chile, puree, 30-32 brix, US$700/mt FOB Santiago Argentina, puree, 30-32 brix, US$800/mt FOB Buenos Aires Turkey, puree, 32 brix, 1150-1250/mt FCA Rotterdam

Market Situation
These Latin American prices are early indications for the present crop. Frost damage to the crop in Argentina has resulted in this indicative price for the new harvest. However, we have seen reports of ample stocks in Chile and the crop is described as satisfactory. This can explain the price differential at this early stage. We would expect prices to fall into line once the harvest is complete. South Africa is reported to have a good crop, but with fresh fruit and canned sales going well, there will be little left for puree. The Turkish price range above reflects lower supply and a quiet market.

BAN/Banana
Prices
Ecuador, ss aseptic, 22 brix, US$620-640/mt FCA Dutch warehouse duty paid

Market Situation
The market is described as stable and calm at the time of writing. Demand is described as normal and plenty of supply is available.

GRA/Grapefruit
Prices
Cuba, white, frozen concentrate, 58 brix, US$1850-1950/mt C+F Holland duty unpaid Florida, pink, frozen concentrate, 58 brix, US$1550-1600/mt FCA Rotterdam duty paid Florida, white, frozen concentrate, 58 brix, US$1700-1900/mt FCA Rotterdam transit 7 Market News Service Fruit Juices

Market Situation
USDA estimates for production in Florida (and the whole of the USA) can be regularly viewed on www.nass.usda.gov/fl, which is updated th th from the 9 to the 12 of every month. The forecast issued on 10 December 2009 of grapefruit for certified utilization (including an allocation of 700,000 boxes of gift fruit and local sales) continues at 19.8 million boxes. This forecast, consisting of 5.8 million boxes of white and 14.0 million boxes of coloured grapefruit, is unchanged from the initial forecast. If realized, this forecast will be 9 percent less than last seasons 21.7 million box utilization. Nielsen reported through the Florida Department of Citrus (FDOC) that sales of grapefruit juice have fallen even further in the four weeks to the end of October 2009. The falls were 5.9% in volume and 3.9% in value. Even NFC accelerated its decline by 7.5% in volume and 8.9% in value. In spite of lower demand, it seems as if supply is reducing even faster. Particularly in the cases of the white and red variants, availability is low enough to put upward pressure on prices. Cuba has recommenced selling into the market as their storm damaged trees come back into production. They are also encouraged by the new raised prices for Florida production. Cuban grapefruit juice is popular due to its high ratio. South Africa is sold out and will not be offering product again until the second quarter of 2010.

GUA/ Guava
Brazil, pink, ss, aseptic pulp, 8-10 brix US$650-700/mt C+F Rotterdam Brazil, pink, pulp concentrate aseptic, 14-16 brix, US$1040-1050/mt C+F Rotterdam

Market Situation
Brazilian supply has been affected by the poor weather in the early spring, but demand is steady and there still seems to be stock available. Fruit prices are reported to have risen by up to Brazilian Rial 0.30/kg. Brazilian domestic demand is quite strong, not only for juice but also for use in confectionary.

LEM/Lemon
Prices
Argentina, frozen concentrate, cloudy, 500gpl US$3250-3600/mt FCA Rotterdam Argentina, frozen concentrate, clear, 500gpl US$3850-4300/mt FCA Rotterdam Brazil, frozen concentrate, cloudy, 400gpl US$2000-24000/mt FOB Santos Italy, frozen concentrate, cloudy, 400gpl, /mt DDP Northern Europe Italy, frozen concentrate, clear 400gpl, /mt DDP Northern Europe

Market Situation
According to the USDA, the Argentine lemon crop will decrease in 2010 over 2009 because of drought and late frosts. Additionally, better 8 Market News Service Fruit Juices prices for fresh production will increase pressure on supply of fruit used for juice.

Stocks at present are very limited. European production is predicted to be down by as much as 25% in 2010. Additionally, European production is simply too expensive to compete even at these high price levels due to the high value of the Euro when compared to production which is sold in US Dollars.

Demand has continued to be good. The use of lemon juice in both drinks and foods has grown during 2009. In part this may be a reaction to the very low prices that prevailed up to the end of 2008.

LIM/Lime
Prices
Mexico, 400gpl, frozen concentrate, US$1700/mt CFR Rotterdam

Market Situation
The lime price has a close relationship with the price of lemon juice. As the lemon price has risen sharply again, there is more interest in lime juice. Consequently the price has risen, but not by as much as the lemon juice price.

MANG/Mango
Prices
India, Alphonso, aseptic puree, 16-17 brix, US$1350-1550/mt CFR Rotterdam India, Totapuri, aseptic concentrate, 28 brix, US$1200-1500/mt CFR Rotterdam India, Totapuri, aseptic puree, 14 brix, US$/mt C+F Rotterdam Colombia, Magdalena, 14-16 brix, aseptic puree, US$920-950/mt C+F Holland Colombia, Magdalena, 28 brix, aseptic concentrate, US$1300-1325/mt C+F Holland Mexico, Tommy Atkins, aseptic concentrate, 28-30 brix, US$1250-1400/mt FCA Rotterdam duty paid Brazil, Tommy Atkins, aseptic concentrate, 28-30 brix, US$1225-1400/mt FOB Santos

Market Situation
The market is reported to be stable and normal. Strong demand is keeping prices firm. A potential difficulty could result from the economic downturn in the Middle East Dubai in particular. There is significant business for the Indian varieties in this region and any reduction could affect the supply/demand ratio. Additionally, we are advised that production of Tommy Atkins in Brazil has been reduced by poor weather. Palmer production is also picked to drop, in this case by as much as 70%. Most Brazilian production is consumed domestically, but such a shortfall could lead to significant imports, which in turn could affect availability of supply from other origins. We have heard of buying enquiries being put out by Brazilian importers.

ORA/Orange
Prices
Brazil, FCOJ, 66 brix, bulk, US$1300-1400/mt FOB Santos Brazil, FCOJ, 66 brix, bulk, US$1425-1650/mt FCA Holland, duty unpaid Brazil, NFC, US$480-550/mt FOB Santos 9 Market News Service Fruit Juices

Market Situation
Supply from Brazil and Florida combined is likely to be reduced by over 7% according to the Florida Department of Citrus (FDOC). This drop includes their estimates of the opening stocks that have also reduced since last season. This is a time of year when demand in the Northern Hemisphere is low. However suppliers are expecting that their customers will become used to the new official price for FCOJ of US$1500/mt in Europe. Presently only a few deals are reported at above this level. The occasional rare big parcel could achieve a price as low as US$1400/mt. This explains the wide spread in prices that are shown above. It would appear as if buyers in some of the more peripheral markets, such as the Middle East and Australia, have been prepared to pay over the odds for supply in the past few weeks. Certainly sentiment is more positive in the market, than we have seen for several months. Some contracts that were written before ANUGA in early October are holding price increases down. We believe that only a few were for delivery in 2010. We therefore believe these new prices will hold, going into next year. As we have commented elsewhere, the effective devaluation of the US dollar mitigates these price rises in Europe and other nonAmerican markets. We note that there could be a real shortage of high ratio juice. The Mexican situation seems to be normal but with the adverse weather affecting the Brazilian crop, it may be that there will be smaller quantities of higher ratio production than usually occurs. The higher price shown above for FCOJ reflects the present levels for higher ratio product for delivery during the first half of 2010. In conclusion, the trend for orange juice prices will most likely be upwards. Supply is tightening and the market is starting to rebuild their 2010 summer stocks. Demand for NFC is increasing everywhere, even in the USA according to the most recent statistics.

Brazil
Brazil is experiencing a variable harvest due to earlier irregular blossoming of the fruit. Increased greening is also reported. Heavy rain in September and October helped the crop, but at the same time contributed to the wide spread of harvest dates. For NFC production, in particular, a constant level of maturity is desirable, and this means that growers are asked to only pick a uniform standard of fruit. This has added to the pressure, on growers who are already feeling badly served by a collapse in fruit prices. Presently, prices are at levels of half of last year in Brazilian Rial terms. For processors and growers, continuing high stock levels of both NFC and FCOJ, low prices and slack demand contributed to an annus horribilis. Fruit prices are reported to have fallen from B.Rls 8.00 to B.Rls 7.50 in the past four weeks. However, for both sectors of the industry, lower crop estimates for next season from both Florida and Brazil, have helped to raise the 10 Market News Service Fruit Juices prospect of price increases. Indeed, the levels shown above are already an advance on those reported in our previous edition. Indeed, we have seen reports of fruit rotting in the groves as a result of the very wet and hot weather of the past few weeks. Despite persistent rumours of a merger between two of the bigger players in the Brazilian industry, Brazils National Development Bank (BNES) is expected to offer support finance of up to US$75 million to the Grupo Fischer, who control Citrsuco. This action has angered growers, who feel that their poor incomes over the past few years have been often a result of low fruit pricing. The bulk of fruit prices are set by the major players. It is debatable whether a merger between one or more of the major players would bring relief to growers in fruit pricing terms. The incidence of citrus canker in So Paulo commercial orange groves has remained relatively unchanged at 0.14%, according to a new survey conducted by Brazil's Fund for

Defence of Citrus Production (Fundecitrus) between May and October 2009. Canker is now relatively under control as the rate of sick plants in 2008 and 2007 amounted to 0.13% and 0.10%, respectively. However, the citrus canker situation might soon change, according to Fundecitrus' technical manager, Ccero Augusto Massari, who projects an increase in the incidence of the disease in 2010, when the first results of relaxed legislation on disease management will be detectable. Between 1999

and June 2009, eradication of all trees in a 30m radius surrounding an infected tree with citrus canker was obligatory. If citrus canker was present in 0.5% of trees, the eradication of an entire plot of 2 000 trees was required. Under pressure from citrus growers, this second requirement was recently scrapped by the So Paulo Agriculture Secretariat.

Florida
USDA estimates for production in Florida (and the whole of the USA) can be regularly viewed on www.nass.usda.gov/fl, which is updated th th from the 9 to the 12 of every month. The Florida all orange forecast released on 10 December 2009 by the USDA Agricultural Statistics Board is 135.0 million boxes, comprised of 66.0 million boxes of Valencia oranges and 69.0 million boxes of the nonValencia varieties (early, midseason, Navel, and Temple). The reduction of 1.0 million boxes is in the Valencia category. If realized, this forecast would be 17 percent less than last seasons production of 162.4 million boxes. This new forecast had an instant effect on the price of FCOJ futures on the NYBOT. At the time of the last report in mid-October 2009, the price was less than US$1.00/lb solid. By early December, it had risen to US$1.17/lb. At the time of writing it is at US$1.30/lb solid, which can be equated to a market price of US$1700/mt FCA Europe. These future prices are for delivery early in 2010. This is often a fairly accurate predicator of actual prices. As we reported a couple of months ago, the demand in the USA for concentrated and NFC orange juice has risen. This took place in the four weeks to the end of October 2009. Unfortunately, as prices have fallen during the same period, the value of this increased volume has further reduced. On behalf of the FDOC, A. C. Nielsen has estimated the volume increase for all orange juice to be 6.4% while the value fell by 7.4%. For NFC, sales were up by 3.9% in volume. At the time of writing, Florida citrus growers are being balloted on whether they wish to continue to be subjected to a levy on their sales. The funds raised are directed towards research which, among other threats, considers the action to eradicate citrus greening. The levy is reviewed every six years. The results will be known early in the New Year.

Other
Mexican production will again benefit from the weather related problems in Brazil. Their high ratio production will be needed to balance the lower ratio early harvest fruit from Brazil. We have seen reports of up to 10% more being paid to growers for their fruit. Mexico also has been forced to invest in measures to counter greening of their orange crop. They have also agreed with Belize to introduce measures to contain the spread of the disease across their mutual borders.

11 Market News Service Fruit Juices

PAP/Papaya
Prices
India, red aseptic concentrate, 25 brix, US$1050-1065/mt FCA Rotterdam India, red aseptic concentrate, 20 brix, US$1000/mt FCA Rotterdam India, red aseptic ss, 9 brix, US$675/mt FCA Rotterdam India, yellow aseptic ss, 8-10 brix, US$695-725/mt FCA Rotterdam India, yellow aseptic concentrate, 25 brix, US$1040/mt FCA Rotterdam

Market Situation
The market is normal. Papaya is used for blends and does not dramatically influence the cost of the blends at these price levels.

PAS/Passion Fruit
Prices
Ecuador, frozen concentrate, 50 brix, US$7500-8000/mt FCA Rotterdam Peru, frozen concentrate, 50 brix, US$7200/mt FOB Callao Ecuador, NFC, 14 brix, US$2700-3000/mt ex-European warehouse Brazil, frozen concentrate 50 brix, US$/mt FOB Santos

Market Situation
The market for passion fruit juice has gradually reduced due, in no small part, to the very limited supply and high prices of the past year. Contrarily to our predictions of a dramatic collapse in prices, so far the return to a better balance between supply and demand has been well managed. One has yet to see all the new production come on stream. Ecuador is presently experiencing a very severe drought. There is the danger of an El Nino summer but, up to now, it is the absence of water that is reducing the fruit supply. Supply has tightened up again and prices have turned back up from lows of US$6500/mt FCA Europe to the levels shown above. Some producers expect prices to come back down to this lower level again, once the rains have started. After that, it will be late March when the next crop size is clear that the next pricing regime will emerge. After two years of high fruit prices, the crop size will probably be significantly larger. Many growers have increased their plantings to cash in on the higher returns. The prices are for sales up to the second quarter of 2010. Therefore these prices are for spot sales and immediate delivery. We have seen reports that Peruvian passion fruit juice has sold well in Europe, with sales more than double compared to last season. This is a result of the shortages and high prices for Ecuadorian production. There will soon be a new variety of passion fruit which has high productivity, producing 30 tonnes per hectares, is resistant to fusarium fungi, and has high degrees brix (13-15), which will make it superior to existing varieties. The new fruit was tested in areas along the Ecuadorian coastline, such as Quevedo and Santo Domingo. Data has been gathered on cultivation disease control.

12 Market News Service Fruit Juices

PIN/Pineapple
Prices
Thailand, Smooth Cayenne, frozen concentrate, 60 brix, US$1950-2050/mt FCA Rotterdam duty unpaid Thailand, Smooth Cayenne, aseptic concentrate, 60 brix, US$1900-2000/mt FCA Rotterdam duty unpaid Costa Rica, MD2, ss, 13 brix, NFC, US$880/mt FCA Holland, duty free Brazil, frozen concentrate, 60 brix, US$/mt FOB Santos

Market Situation
There seems to be an air of stability and satisfaction in the pineapple juice business at the time of writing. Prices have risen substantially over 2009 and supply is gradually increasing but not at a dramatic rate. This increase may result in some downward pressure on the less popular varieties, as better supply of the top quality and higher ratio fruit becomes available. We are seeing reports of small processors selling at lower prices for quick sales. This option is available because stocks in Europe and elsewhere are low. The fruit prices have remained satisfactory to growers. This has meant that the minimum fruit price, which the Thai government set and controlled, has been consistently exceeded since its announcement. The present Thai harvest is nearly finished and is reported to be satisfactory from all sectors perspectives.

PEA/Peach
Prices
Chile/Argentina, puree, 30-32 brix, US$825-890/mt FCA Rotterdam

Market Situation
Reports for the European growing season indicate that production of peaches in 2009 have been similar to 2008. However, with a decline in fresh fruit sales due to consumers choosing alternative fruit, there appears to be ample supply for canning and puree production. From the other side of the Atlantic, we have heard that growers are reducing their numbers of trees due to excess supply in the market. There are indications of significant quantities of fruit that remain unsold. From South Africa, it seems as if there will be only small quantities available.

13 Market News Service Fruit Juices

POM/Pomegranate
Prices
Turkey, aseptic concentrate, 66 brix, 3700-3900/kg FCA Rotterdam

Market Situation
The market is normal at the time of writing. Early crop indications from Turkey suggest that supply may be slightly less than expected and that fruit prices are higher. This could also be a result of higher demand for this superfruit from consumers. As usual this sales avenue would attract higher prices.

14 Market News Service Fruit Juices

Street address International Trade Centre 54-56 Rue de Montbrillant 1202 Geneva, Switzerland

P: +41 22 730 0111 F: +41 22 733 4439 E: itcreg@intracen.org www.intracen.org

Postal address International Trade Centre Palais des Nations 1211 Geneva 10, Switzerland

The International Trade Centre (ITC) is the joint agency of the World Trade Organization and the United Nations.