Contamination concerns led to orange juice price hike

13 January 2012

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14 January 2012 | Adam Leach

Colder-than-expected conditions in Florida and fears over contaminated imports resulted in the futures price of orange juice hitting the highest price seen since 1977.

It rose to $2.13/lb before settling down later in the week to the higher-than-average price of $1.88/lb on the ICE futures exchange. The price spike occurred after fears that cold weather in Florida would damage citrus farms were compounded by a contamination scare. The problem followed an announcement by the Food and Drug Administration (FDA) that product from Brazil containing a banned substance had entered the country.

In a letter to the executive director of the Juice Products Association, dated 9 January 2012, Nega Beru, director of FDA body the Office of Food Safety, said it had been alerted by a drinks company that low levels of carbendazim [which is banned in the US but not in Brazil] had been detected in its products and that of competitors. The drinks company was later confirmed to be Coca-Cola, which owns the Minute Maid and Simply Orange brands. The FDA said it would not remove domestically produced products but that it would carry out an investigation to see whether potentially dangerous levels were found.

The letter said: “The FDA does not intend to take action to remove from domestic commerce orange juice containing the reported low levels of carbendazim. The FDA is, however, conducting its own testing of orange juice for carbendazim, and, if the agency identifies orange juice with carbendazim at levels that present a public health risk it will alert the public and take the necessary action to ensure the product is removed from the market.”

As use of the chemical is banned throughout the US [around 75 per cent of orange juice is produced domestically in Florida], suspicions turned to supplies from Brazil [which produces around 25 per cent of orange juice consumed in the US]. Fears that supplies from Brazil (the world’s largest producer) could be banned sent the price spiraling.

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