Orange and apple juice, an integral part of many people's breakfast, could become an unaffordable "luxury", according to a report, which highlights how the price of fruit juice has rocketed.
The price of orange juice has more than doubled on the commodity markets Photo: Fran Stothard / SWNS.COM
A series of bad harvests from Florida, America to Shandong Province, China, combined with increased demand from Asian countries, has forced up the price of orange and apple juice on the world market. Supermarkets have started to react in Britain by pushing up the price of a carton of juice.
The Grocer, the industry trade magazine, reported prices are set to climb even higher making most juices a "luxury".
Experts predicted factory prices could rise by as much as 80 per cent for orange juice and 60 per cent for apple juice in 2011.
This would place further pressure on retailers to increase the price of orange and apple juices on shop shelves even though they have already gone up sharply. Over the past year, the price of a one-litre carton of Tropicana fresh orange juice across the five major supermarket chains has risen 22 per cent, from an average of £1.80 to an average of £2.19, while a one-litre carton of own-label apple juice from concentrate has gone up an average of 21 per cent, from 87p a year ago to £1.05 now.
Fruit juices are just the latest key household staple to be hit by the spike in global commodity prices, which has affected everything from a litre of unleaded petrol to a loaf of bread.
The Office for National Statistics has calculated that inflation, based on the Consumer Prices Index, increased from 3.3 per cent in November to 3.7 per cent in December, with food prices driving much of this jump. Food increased in price by 6.1 per cent during last year, with butter, fruit, lamb, tea and juices particularly badly hit.
Orange juice has been particularly affected by the bitterly cold winter in Florida last year, the main orange growing area in the world and which at one point was colder than Alaska. Cold weather in China, too, wiped out 40 per cent of the apple harvest in some parts of the country. China has become one of the main producers of apples in the world.
Richard Hall, chairman of food consultancy Zenith International, said orange and apple juice producers were already the world's largest, most efficient juice producers, so there was little room for them to absorb cost increases.
"Pricing for orange and apple juice this year could see the most radical change," he said.
Adam Pritchard, chief executive of drinks maker Pomegreat, which makes pomegranate and other juices, said costs had gone up 40 per cent and his company would have to pass on about 10 per cent increase.
"Part of the problem is the upward shift in demand from places such as China and India, who are spending more money on expensive drinks. This is putting pressure on the world markets.
"I think consumers are still feeling the pain, and if they see the price of their staple products in the supermarket go up, they will see them as a luxury and cut back. We're not talking an extra 5p or 10p on a carton of orange juice, we're talking a doubling in price."
According to Mintec, a research company that tracks commodity prices, the price of frozen orange juice concentrate has climbed by 143 per cent in the last two years from $1,500 (£940) to $3,647. Apple juice prices are now at £1,500 a tonne, up from £650 just a year ago.
While poor harvests have affected food prices around the world have been the main reason, higher oil prices have also had a large affect, pushing up the price of packaging, and distributing the juices.
Tuesday 15 February 2011
Orange juice will soon be 'luxury' - Telegraph
via telegraph.co.uk
