Prices also got a boost from the FDA's decision to study the fungicide used in Brazil, which may lead to a U.S. ban on imports, Judy Ganes-Chase, the president of J. Ganes Consulting in Katonah, New York, said in an e-mail.
"The fungicide is the primary driver," Sterling Smith, an analyst with Country Hedging in St. Paul, Minnesota, said in a telephone interview. The market "is very nervous" about a potential import ban, which may boost the futures price by 20 cents to 40 cents a pound, he said.
About 25 percent of the orange juice consumed in the U.S. comes from Brazil, according to Andrew Meadows, director of communication for Florida Citrus Mutual, the state's largest citrus grower organization, based in Lakeland.
The FDA was notified by a juice company on Dec. 28 that it had detected low levels of carbendazim on some products, Nega Beru, the FDA's Director for the Office of Food Safety Center and Applied Nutrition, said in a letter sent to the citrus industry yesterday. The U.S. Environmental Protection Agency has not approved carbendazim for use on oranges.
FDA Study
While a preliminary EPA risk assessment concluded "that consumption of orange juice with carbendazim at the low levels that have been reported does not raise safety concerns," the FDA is "conducting its own testing," Beru said.
"FDA is also sampling import shipments of orange juice and will deny entry to shipments that test positive for carbendazim," Beru said in the letter.
Inventories of frozen orange juice at facilities monitored by ICE tumbled 58 percent to 22.785 million pounds as of Jan. 6 from a year earlier, exchange data show.
The U.S. Department of Agriculture will release a new estimate for Florida's orange production on Jan. 12. Last month, the agency raised its forecast by 2 percent to 150 million boxes, citing bigger fruit size. A box weighs 90 pounds, or 41 kilograms.
The USDA estimate this week may include some of the damage from cold weather, Smith said. A more complete assessment will be made in the February report, he said.