The price of orange juice (OJ) is set to be squeezed higher, with bad weather and citrus disease threatening some of the lowest supplies since World War Two.
Tight supplies come in the wake of the pandemic which saw resurgent demand for OJ up to a 20-year high as health-conscious consumers sought fresh foods, vitamins, and consumed many more breakfasts at home.
"You have your classical supply-demand mismatch," Shawn Hackett, an American agricultural commodities analyst said in a CNN interview.
The analyst added that he expected to see much higher prices at the supermarkets.
The US Department of Agriculture (USDA) expects Florida, America’s largest orange producer, to harvest 44.5mln boxes of oranges which is short of previously lowered expectations.
One reason for the dwindling supply of oranges is a citrus disease, known as citrus greening, which is reducing the size of oranges and the number of fruits per tree.
Brazil, one of the world’s other major orange exporters, suffered from drought last year, denting yield in the orange crop.
The impact includes the need for processors to buy more oranges to produce the same quantity of juice, further adding to demand.
In the market, frozen orange juice futures soared over 50% during the pandemic and last week saw a two-year high.
It is another price hike at a time when household budgets are already squeezed, for food and energy particularly.
UK inflation has soared to its highest level for nearly 30 years, increasing the squeeze on the cost of living and piling more pressure on the Bank of England to raise interest rates next month (read more).