Pesticide residue hysteria takes hold of the markets.
The Wall Street Journal reports,
Orange-juice prices settled at a new high Monday, as anxiety over Brazilian imports and Florida weather shook the normally quiet futures market…
Last week, futures gained after the U.S. Food and Drug Administration said it was testing all frozen-concentrate orange-juice imports for a fungicide that isn’t approved for use on oranges in the U.S.
Although the FDA released the results of 19 of 45 samples taken, juice from Brazil, the largest foreign supplier to the U.S. and the suspected source of the contaminant, wasn’t included among the results. Juices were tested from Belize, Canada, Costa Rica, Honduras and Mexico…
Analysts say that, if the Brazilian juice tests positive, the FDA could curtail imports and leave the U.S. short on juice.
“Florida doesn’t produce enough orange juice for the entire U.S.,” said Liberty Trading Group President James Cordier. “Everyone’s going to be crunching numbers trying to figure out what we’re going to do without Brazilian orange juice.”
The fungicide tests touched off a reaction in the market, which usually focuses on weather reports and keeps prices in a tight range.
“This came out of left field, and it was so sudden, with kind of a panic and alarm bells and dramatic action,” said Kevin Kerr, president of Kerr Trading International.
In addition to the overhang of the FDA’s fungicide tests, traders were concerned Florida’s groves remain vulnerable to freezing weather after a 10-day cold snap earlier this month…
How long will it be until climate change is blamed for the emergence of the fungus as well as the Florida freeze?