Florida, the “sunshine state”. Or should that be the “frozen orange state”?
One of my favourite drinks is orange juice. Especially if some ice and vodka have been mixed with it.
There’s a high chance though that the price of my drink will increase this year.
The orange juice commodity market on the ICE Futures US exchange is pretty volatile at the moment. The reason?
The Florida orange crop was badly hit last month by cold weather.
Florida is the world’s second largest producer of oranges and temperatures last month were the coldest December temperatures on record in Florida.
The end result was that the crops were badly damaged. With the supply of oranges being reduced and the demand staying consistent, basic economic theory means that prices will go up.
Indeed they already have. Orange juice prices are currently near a 4-year high and the expectation is that the prices will increase further.
So this will mean that when you buy your fresh oranges at the market they will cost more.
It’s not just the fresh fruit that will be impacted though. Coca-Cola have announced plans to increase the prices of their Simply Juice drinks by between 4% and 8% this year.
Luckily the price of vodka and ice has been unaffected by the cold weather.