What has been happening with investing in oranges?
Before 2023, orange juice was not even close to being an interesting investment for traders. But since the beginning of this year, prices started to soar.
As other raw materials, like oil, wheat and others have been impacted by the war in Ukraine and other events worldwide, the volatility and decreases have deterred investers from them.
Though the beginning of this year, saw a spectactular 30 percent increase in the price on the stock market, despite it being a cyclical raw material.
Projections for this year (and perhaps the future), is that this will be one of the most profitable investments to make on raw materials with a limit nobody knows about.
However, one should not forget that the market can be volatile and prices can shift once the hype is over. Maybe.
Where is the most important impact found for this raw material?
Florida, the sunshine state, has had its claws in the North American oranges market for the longest time. And as such, has been a huge impact for the stock market of this raw material.
In the past, a monopoly of over 80 percent of oranges was in the hands of Floridian orange producers. But, it has not been as much as it used to be.
With a decline in production of over 60% and 30% less employees in the industry, combined with the terrible weather conditions Florida has had to deal with, it sounds like a bad position.
However, the demand for orange juice started rising during these times, which in its basic form of demand versus supply, got the price for orange juice in the U.S. rising.
Consumers were buying more store-bought orange juice, while the production lagged behind.
This actually shows that a bad time for the industry, does not mean a bad time for the stock market.
How does the future investment look for oranges as raw material?
As production has been trying to keep up with demand, by increasing its own in Florida and Brazil increasing its export to the U.S., the line seems to still be going upwards.
There is a caviat in trading orange juice and whether the trend will persist. As with all stocks, there are many hedge funds and big traders that hold a large portion of the market.
Their trades influence the market as a whole, even though there are millions of other small traders and private investments done on the market.
Oil, gas, wheat, they all have millions of people trading in them, but orange juice is not as widespread.
The fact that a couple of hedge funds hold the majority stock of orange juice and only a small number of investors are trading on this raw mateirla, means that the whole trend and stock could fall harder than most other investments.
Besides that, when a raw material becomes too expensive for the public, there will be alternatives used to supress the cost.
For the health benefits of orange juice or hydration purposes, a lot of alternatives exist that could take its place and drop the stock market.
Therefore it is wise to buy and sell according to your own strategy and to keep an eye on the news behind this interesting raw material.