Orange juice squeezed by nature

Britain's daily dose of Vitamin C may be about to get a lot more expensive.

The price of frozen orange juice hit a 14-year high last week, pushed up by speculators betting that supply would remain tight this year after hurricanes and dry weather had reduced growing in the world's leading orange-producing countries.

"Mother Nature has certainly done a job on the Florida citrus industry," said a spokesman for Tropicana, the world's biggest orange juice seller. Florida is the world's number-two orange producer behind Brazil, where production was also down last year.

The price for orange juice futures - the price of frozen juice to be delivered at a date in the future - has nearly doubled since the beginning of 2005.

It has gained nearly one-third since January on predictions of another heavy hurricane season in Florida. The US Department of Agriculture predicted on Friday that Florida will produce 153 million boxes this year, one-fifth less than earlier predicted.

Consumption, meanwhile, is on the rise. According to the British Soft Drinks Association, Britons guzzled 1.4 billion litres of fruit juice in 2005, an increase of 6.8 per cent over the year before. Orange juice accounts for about 70 per cent of fruit juices consumed in the UK.

Tropicana has already passed some of the cost along to customers, hiking its juice prices by 7 per cent last year. Where the cost crunch will be most acute, however, is in "ambient" juice - the cheap supermarket branded juices stored at room-temperature, said a BSDA spokesman. "The margins [for ambient juices] are razor thin, so any squeeze has got to happen there," he said.

By late Friday, the price of frozen juice for July delivery was $1.57 a pound (£1.82 per kg), just off the high of $1.63 it reached earlier in the week.