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Crop drop drives orange juice to 13-month high

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Orange juice prices jumped to their highest for more than a year as a US forecast of a frist-hurt Florida citrus crop, reflected in the worst hurricane-free grapefruit harvest since World War II, continued to buoy the market.

Orange juice, which closed limit up in New York on Friday, added a further 3.5% on Monday to close at 112.40 cents a pound for November delivery, the best finish for a nearest contract since August 2008.

The surges follow a US Department of Agriculture forecast that orange output in Florida, America's biggest citrus-producing state, would slide 16% in the year beginning in December to 136m boxes, equivalent to 6.12m tonnes.

The juice yield per box of oranges was also forecast 2% down year on year.

'Declining quickly'

The estimate reflected poor weather conditions – a frost early in 2009, followed by drought which had cut average yields by 19%.

Florida's crop has also been hurt by disease, including greening, a bacterial infection borne by a type of psyllid insect.

"Grove caretakers continued [in September] to survey groves for greening, treat trees for citrus psyllid control, and remove infected trees," the USDA report said.

The report also noted that "in poorly-cared-for groves, trees were declining quickly due to citrus Tristeza virus, young tree decline, and canker".

Grapefruit squeezed

Furthermore, poor prices have cut plantings, with US data last month showing groves in Florida down 1.3% at 568,800.

While prices jumped to 209.50 cents a pound in February 2007, as supplies continued to suffer a hangover from damage caused by four hurricanes in 2004 and Hurricane Wilma in 2005, they declined quickly when production recovered.

The USDA report also forecast a drop of 10%, to 855,000 tonnes, in America's lemon crop.

Florida's grapefruit harvest was pegged at 19.8m boxes (842,000 tonnes), down 9% year on year, which would be the state's lowest crop since 1944-45, bar the hurricane damaged 2004-06 period.

The report said. "The number of bearing trees has been declining over the past decade. Size and drop of both varieties are expected to be below average at harvest."

By Agrimoney.com

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