Brazil Growers See Windfall From Freeze

The killing frost in Florida’s orange groves will hand Brazil’s citrus growers a huge windfall profit in exports for the second year in a row, Brazilian producers believe.

Brazil is the only country in the world with a big enough orange crop, plus the crushing and concentration facilities, to make up a U.S. shortage when there is serious damage to orchards in Florida.

Because Florida groves were damaged by frost at Christmas, 1983, and by subsequent outbreaks of citrus canker, Brazil’s three major exporters--Cargill, Citrosuco and Citrrale--have already sold most of their 1984 crop.

The current frost in Florida, the major source for U.S. orange juice, makes it certain that the boom will continue when its new harvest begins here in July.

Brazil’s orange concentrate exports soared last year to a value of $1.3 billion, an increase of 120% over the previous year. Brazil exports 90% of its concentrate, and last year 70% of that went to the United States.

In the key production region in the state of Sao Paulo, orange groves have been expanded from 80 million trees to 100 million trees for this year’s harvest. And industry sources predict that Brazilian production could rise from 180 million boxes of oranges last year to 230 million.

Bulk shipping facilities for orange juice concentrate have been installed by the major exporters in the port of Santos, and tankers that load there deliver the concentrate to special terminals in New York, Philadelphia and Rotterdam.

This year’s harvest should provide more than 800,000 tons of concentrate at prices similar to the record levels of last year. After the U.S. frost in 1983, prices rose from $1,000 a ton to more than $1,800.

All of this has meant prosperity for Brazil’s main production region, which centers on Bebedouro, 250 miles north of Sao Paulo. There are new stores and dozens of housing starts in the area’s 60 towns. Tractor and automobile sales have boomed. Land prices have soared, as has the cost of new orange trees from nurseries.

For Brazil’s financial officials, grappling with a foreign debt of more than $100 billion, the prospect of continued big orange juice exports is welcome news. Last year, Brazil registered record export earnings of $27 billion, with only coffee and soybeans ranking ahead of orange juice in earnings.