Coronavirus fears drive up orange juice prices
While global stock prices have been battered, the coronavirus outbreak has been a major boon for orange juice futures, which have surged, rising by more than 6% on Tuesday and banking a fourth straight session in the green.
Why it matters: Thanks to a meteoric rise over the past week, orange juice has become one of the world's top performing assets so far this year.
What's happening: The COVID-19 outbreak is hitting both supply and demand for OJ. A desire for immune-boosting vitamin C has increased demand at stores while fear of infection is peeling off labor supply in key hubs.
- "Traders are wondering if workers are around to man the plants here in Florida and in Brazil," Jack Scoville, a futures market analyst for the PRICE Group, wrote in a recent note.
- "In addition, there are not enough tankers or containers around for shipping the product to buyers. Pickers are not going out into groves to pick the fruit for fear of getting too close to affected fellow workers and catching the coronavirus disease."
But, but, but: While orange juice has risen to near its highest price in a year, it remains well below its 2017 and 2018 highs, and is almost 50% below the settlement price it touched in late 2016.
Go deeper: A coronavirus guide for individual investors