LONDON, United Kingdom – The coronavirus is squeezing the seeds out of the orange juice market, with prices surging this week as consumers hope the vitamin C-rich drink will help fight the disease, analysts say.
The price of a pound of orange juice soared by more than a fifth to strike a one-year peak of 122 cents on Thursday, March 26, in New York, where the commodity is traded, before paring some of its gains.
"Both demand and supply factors are contributing to the upward squeeze on orange juice markets," AxiCorp analyst Stephen Innes told Agence France-Presse (AFP).
"Orange juice has been in huge demand due to its immune enhancing properties to ward off the flu.
"But this demand bounce has been compounded by two supply constraints."
At the same time, virus-linked lockdowns around the world and changing labor practices meant that there were fewer fruit pickers available to pick oranges.
"Due to the airline shutdown, there are few available cargo tankers to bring oranges and pulp to markets, while social distancing practices in orange groves around the world see fewer pickers taking to the field," Innes said.
"There's been a surge in spot prices that are now funneling their way through futures markets this week.
"The more prolonged the lockdown scenario, the more beneficial to orange juice prices, presumably."
François Sonneville, commodity analyst at Rabobank, added that OJ demand traditionally spikes when there is a bad outbreak of influenza.
"This is not an uncommon reaction during outbreaks of flu as the demand side is impacted by consumers selecting healthier drink," Sonneville told AFP.
"There is a lot of debate whether orange juice is healthy of course, driven by its high amount of natural sugars, but vitamin C has been shown to strengthen the immune system.
"Of course, COVID-19 is different from other 'flu outbreaks, but we too have a bottle of orange juice in our fridge – we are not medics in our household, but extra vitamin C cannot hurt."
Sonneville also noted that most orange juice trade flows into Europe and the rest of the world come from Brazil, but some premium products originate from elsewhere – including Spain. – Rappler.com