Orange juice futures in the United States reached an all-time high Tuesday as officials from the federal Food and Drug Administration issued a moratorium on imports from Brazil. According to Reuters, small doses of a fungicide not permitted in the U.S. were used on the Brazilian oranges.
The FDA decided to block Brazilian orange juice after testing found traces of the fungicide carbendazim. Brazilian farmers use the fungicide to protect against black spot and blossom blight, but health concerns prompted its ban in the U.S. All imports bearing traces of the fungicide will be blocked, the FDA said.
Brazil is the market leader in orange imports, with nearly a quarter of the U.S. supply coming from the South American country. In frozen and fresh orange juice imports, that fraction jumps to nearly one-half.
The market has also been briefly benefitted by a freeze in Florida last week, which led to fears of a shortage and a rise in retail prices of orange juice products such as Tropicana and Minute Maid.
“If we take Brazilian OJ out of the market, it has not reached its peak certainly,” James Cordier, president of Liberty Trading Group, told Reuters. “We’re in uncharted waters. We lost oranges on the freeze last week but this certainly trumps that.”
According to the news agency, the frozen orange juice market rose nearly 11 percent Tuesday, with the benchmark March contract jumping the 20-cents daily limit to close at $2.0775 in early trading.
