Orange Juice Crisis Case Study

871 Words 4 Pages
Case Study: Orange Juice Crisis, or Maybe Not
Due to the speculation of decreased orange juice supply, orange juice futures jumped 1.5% for January 2016, according to the New York based global commodity trading organization Intercontinental Exchange® (ICE®) (Perez, 2015).
The basis for this claim is the proliferation of a century-old disease that is expected to devastate the worlds’ orange juice supply in the coming years (Perez, 2015). The disease, known as Huanglongbing (HLB), or “citrus greening,” is caused by the Asian citrus psyllid insect. The insect spreads the disease as it moves from tree to tree, eating the branches and leaves. Once the disease manifests itself in the tree, it molests the unripe fruit, resulting in
…show more content…
In South America, Brazil is a significant producer of oranges and has had the ability to pick up some of the supply loss from Florida’s misfortune. Despite Brazil’s prolific orange juice production capabilities though, ICE® expects that a supply shortfall will result in a price increase for orange juice (Perez, 2015). However, let it be known that according to more recent reports, the higher price of orange juice does not seem to be deterring buyers from now purchasing orange juice …show more content…
As it stands right now, orange growers will need to plant in excess of 20 million trees over the next decade to survive (M&G Africa Writer, 2015).
Accordingly, the first policy recommendation is for the United States Federal Government to provide grants to U.S. based companies, non-profit research organizations, or educational institutions directly related to this cause for the research and development (R&D) of such product or process. The fact that the disease is affecting Florida crops provides an intrinsic and emergent need for the U.S. to provide the necessary support to end the spread of HLB, hence the funding provides the company or organization the incentive they need to focus in the government’s desired area (Lumen

Related Documents