UPDATE 1-Brazilian orange juice stocks lowest on record as yields fall
(Adds comments from CitrusBR director)
SAO PAULO Feb 13 Brazilian orange juice producers ended 2016 with the lowest level of stocks on record, as sagging processing yields and a smaller crop reduced output in the world's largest exporter.
Orange juice stocks (frozen, concentrated equivalent) fell to 497,383 tonnes at the end of December, compared with 728,865 tonnes at the same time a year earlier, industry group CitrusBR said in a report on Monday.
That is the smallest level since readings started in 2000. CitrusBR projects the stocks will continue to drop until the next crop (2017/18) starts in July.
The industry group said frozen, concentrated orange juice (Fcoj) stocks at the end of the crop year on June 30 are projected at 70,290 tonnes, or enough for three weeks of sales.
"I am not sure how this will impact the day-to-day operations of the companies," said Ibiapaba Neto, executive director of CitrusBR.
Brazil is facing two consecutive small orange crops. The current season is projected to be the smallest in 28 years, with 244 million boxes - each box is 40.8 kg (90 lbs) - compared to 300 million boxes for the previous crop.
Neto says the quality of the crop is also a problem, largely due to a change in the location of fruit farms to areas where rain is more abundant in the last 10 to 15 years. As a result, oranges have more water and less juice.
"We are using more oranges to produce a tonne of concentrated juice," he said.
Processors used on average 288 boxes of oranges to produce a tonne of Fcoj in the current crop compared with the multi-year average yield of 250 boxes to make a tonne of juice.
Fcoj prices in New York hit an all-time high late last year. Despite a recent decline juice is still trading at the highest values in five years.
Brazil supplies 80 percent of the global orange juice market. (Reporting by Marcelo Teixeira; Editing by W Simon and Paul Simao)