Orange oil is extracted by simple pressure from the outer coloured part of the Citrus sinensis' peel. Oranges are widely cultivated in tropical and subtropical climates for the sweet fruit and commercially for essential oil extraction.
Orange oil is a by-product of the juice industry. Oil is cold pressed from the peel of the fruit, after juice extraction and is widely used across the flavour and fragrance industry. Sweet orange (citrus sinensis) is around 90% d’limonene, a product used across many more industries. Approximately 40% of global oranges are processed for juice and oil with 60% solely used as a fresh fruit for consumption.
Brazil has the largest production of fresh oranges and also it processes more orange than any other country making it the largest producer of orange oil and d’limonene (orange terpenes) in the world. Harvesting can be almost 12 months of the year due to the widespread distribution of plantations, however it is unusual for any significant production during February – April. Therefore we usually consider May - December as a typical harvesting period.
Brazilian oranges make up for around 34% of the world market – approximately 17 million tons+/- from a global estimate of 50 million tons +/- of fresh fruit. The Brazilian state of São Paulo contributes around 80% of the country’s production figures.
It's been a challenging time of late for the world's largest producing country and they're forecasting a sharp reduction of 18.3% in the total 2016/17 crop. To read more about today's conditions click here.
You may have recently read in our Market reports details of the challenges faced by the industry due to Citrus Greening. Click here for more details of the global impact of this wide spreading disease.
In January 2018 the USDA forecast a substantial 15% year-on-year reduction in Brazil’s orange production to 17.3 million MT (425 million boxes of 40.0 kg) for 2017/18. Since Brazil is in the southern hemisphere, the Brazilian crop year begins in July and the USDA crop year estimates for 2017/2018 refer to the year beginning in July 2018. This estimated reduction is based on lower yields and an off-cycle year. Unfavourable weather conditions resulted in poor bloom and fruit set. Nevertheless, the crop is still larger than two years ago. Moreover, estimates could be revised upwards in May following new flowering at the end of 2017 combined with improved weather conditions.
The USDA figure for the current 2016/2017 crop has been revised upwards to 20.4 million MT (500 million boxes). This increase is due mainly to favourable weather conditions, and reinvigorated orange groves recovering after an off year, which resulted in good bloom and fruit set and a larger size of fruits from the Sao Paulo and Minas Gerais regions. Sao Paulo state dominates Brazilian orange production, accounting for approximately three-quarters of output.
The trends in Brazilian orange production and processing are summarised below.
While fresh orange consumption is down only slightly, the impact of the predicted fall in production will be greatest on orange processing, and hence orange juice and orange oil production. Oranges for processing are estimated to be down 2.9 million MT (65 degree brix) in 2017/18 to 12.3 million MT (302 million boxes), leading to a fall in orange juice production and exports. Orange juice production is slated to plunge 16% based on fewer oranges and reduced consumption. Brazil accounts for approximately three-quarters of world orange juice exports. Further Increases in price can be expected for the new crop,
Alongside the number of oranges produced and processed, the size of the fruit can also influence the amount of orange oil produced. Thus, the bigger the fruit, the smaller number of fruit per box and the less overall surface processed which in turn means a lower quantity of essential oil. Because of lower orange oil production and a limited inventory the market will continue to remain firm.
On a brighter note, recent data suggest that the impact of greening has stabilised over the past two years. An official survey in 2017 showed that 16.73% of trees in the main growing regions were affected by greening, compared with 16.92% in 2016. Good management practices including the removal of infected trees have limited the spread of the disease.
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