Mar 25, 2020 - Economy & Business

Coronavirus fears drive up orange juice prices

Data: FactSet; Chart: Axios Visuals

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

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Coronavirus outbreak has likely already pushed multiple countries into recession

A trader at the New York Stock Exchange on March 5. Photo: Michael Nagle/Xinhua via Getty) (Xinhua/Michael Nagle via Getty Images

Benchmark U.S. 10-year Treasury yields fell to under 0.5% with the 30-year below 1% for the first time ever, oil plummeted by as much as 31%, Australia's ASX index lost 7.3% (its worst day since the financial crisis) and markets in Asia and Europe cratered.

What happened: The economic shock of the coronavirus looks set to worsen as more places around the world, including the U.S., may institute quarantine measures that would severely reduce consumer activity.

Coronavirus dents tech's supply chain

Illustration: Sarah Grillo/Axios

The novel coronavirus has just begun to shut down offices and public gatherings across the U.S., but its impact on hardware and components production in China started weeks ago, and the flow of goods out of China's factories has been slow to recover.

Why it matters: The global tech economy's just-in-time supply chain has never faced a disruption quite like this one. And while many observers are guardedly optimistic, no one knows for sure yet how this crisis will play out or what sorts of shortages the industry might still face.

OPEC-Russia oil price war escalates as Saudi Aramco announces supply increase

Data: Money.net; Chart: Andrew Witherspoon/Axios

The new oil price war escalated Tuesday as Saudi state oil giant Aramco announced, per reports in Reuters and elsewhere, that it plans to supply the market with 12.3 million barrels per day starting next month.

Why it matters: The increase underscores how the lunge for market share with the collapse of the OPEC+ agreement is going to create financial pain and problems for producers and governments worldwide.