Orange Juice Futures compression On Trump's Brazil Tariff Threat

President Trump fired off a flurry of trade warning letters last week to countries including South Korea, Brazil, Europe, Mexico, and Canada. In one letter to Brazilian President Luiz Inácio “Lula” da Silva, Trump announced the potential for a new 50% tariff on imports from Brazil. The move has since sparked fears of supply disruptions and sent orange juice futures in New York soaring to a four-month high.

The most active contract jumped 8.655% to $3.1385 a pound on Monday, the highest since early March. Orange juice futures have been rallying since Trump’s trade warning letter to the South American country last week, stoking fears of renewed supply disruptions. Prices previously surged as high as $5 a pound in late 2024, as U.S. orange juice production fell to decade lows. Prices then crashed earlier this year.

OJ is on track for the largest monthly gain since January 1981.

The threat of disrupted OJ supplies comes as the U.S. has ramped up imports from Brazil in recent years, with Florida production in disarray due to greening disease and hurricanes that have devastated large swaths of groves, according to Craig Elliott, a market analyst at Expana, as cited by Bloomberg. He noted that while the full impact of the proposed tariff remains uncertain, the volume of trade at risk is substantial and could further undermine Brazil’s competitiveness.

Tariffs risk upending Brazil–U.S. ag trade across a wide range of goods (much more than just OJ) — from coffee and red meat to poultry, pork, and more.