Orange juice is back on the table in American homes. In recent years, many people have passed on orange juice due to health concerns over its sugar content. The Coronavirus pandemic is making orange juice great again.
In the first quarter of 2020, orange juice surprised financial markets. Economists are now predicting that prices for the beverage will soon rise.
What happened? Two things: Coronavirus and Brazil. Oranges contain vitamin C, which can boost your immune system. A lot of people believe that drinking enough orange juice will shield them from the Coronavirus. The science has not supported this idea, but many Americans increase their OJ consumption whenever there is a health scare. This happened during the winter of 2018 when there was an uptick in influenza cases, and OJ sales had their best three-month period in several years. Plus, since more people are home from work, they are less likely to skip breakfast and more likely to drink a glass of orange juice in the morning.
Brazil, meanwhile, is warning about a poor harvest in the 2020-2021 season. Farmers say poor weather conditions are impacting crops, and this might affect the supply of oranges. This might lift prices.
In the end, it shows how the market is cyclical. When demand is high and supply is low, is causes prices to increase. That’s a basic law of economics.