Swine flu fear spurs orange juice demand

The spread of swine flu in the U.S. is helping to fuel the biggest orange juice rally in three decades, and rising demand may send prices up an additional 25 percent by February, said Fain Shaffer at Infinity Trading Corp.

U.S. orange juice sales made their biggest October jump since at least 2001, according to Nielsen data from the Florida Department of Citrus. Orange juice futures are up 66 percent this year, the most since 1977. Infections of the H1N1 virus have almost tripled in the past three months, according to the World Health Organization.

“A lot of people think high doses of Vitamin C will keep them from getting the common cold and flu,” Shaffer, Infinity’s president, said from Medford, Oregon. “We had a lot of speculators calling, and most of them are saying, ‘I want to get a position because I think the swine flu is going to hit, and people are going to be drinking a lot more orange juice.’”

The price may jump 25 percent to $1.40 a pound during the next 11 weeks on ICE Futures U.S. in New York, after closing on Tuesday at $1.124, Shaffer said. The price last reached $1.40 in February 2008.

U.S. retailers sold 49.3 million gallons of orange juice in the four weeks ended Oct. 31, up 6.4 percent from the similar period a year earlier, according to Nielsen data that goes back as far as the season that began in 2001. Swine flu infections are rising at the fastest pace for influenza in four decades, infecting 22 million people, or 7.1 percent of the U.S. population, in the first six months of the pandemic, the Centers for Disease Control and Prevention said on Nov. 12.

In addition to the “flu premium,” the threat of freeze damage to the Florida orange crop will increase over the next few months, Shaffer said. Florida, the world’s largest orange grower after Brazil, already is expected to produce 16 percent less than a year earlier, according to the U.S. Department of Agriculture.