A direct result of the recent hurricane that swept the East Coast is that the cost of your morning OJ is about to increase. According to futures markets experts, the extent of the change in price depends on certain variables. One such variable is whether the shortfall of produce can be remedied by Brazilian imports, as Florida Department of Citrus has reported anything between 30% and 70% crop loss due to the natural disaster. Irrespective of this, there is a certainty that prices of orange juice on market shelves is going to increase.
According to the ICE futures exchange, the price for frozen concentrated orange juice rose from $130.05 the day before Irma formed on August 29, and peaked at $157.15 in the week after Irma- an 11% increase from before Irma formed. This increase in demand has resulted in predictions of OJ jumping from $1 to $2 on store shelves. This is terrible news for the many that enjoy a morning orange juice with breakfast, but a bittersweet moment for those with shares in not only frozen concentrated orange juice, but the orange fruit itself. In November 2016 the stock price of oranges spiked, and it was noted that the demand surrounded fresh oranges as much as it did concentrated juice. Other shares that have altered because of extenuating circumstances are information technology stocks, which declined sharply as North Korea was reported to be treating a Tweet from President Donald Trump as a declaration of war. This was responded to by the U.S. administration as ‘absurd’, and the stock prices for information technology have since risen.
It is fair to assume that natural disasters such as hurricanes cannot be predicted. People can be warned a short time in advance, and do everything they can to protect themselves, their properties, and their belongings before the weather hits. Unpredictable events, in respect of the stock exchange, can either make or break an investor’s account, and they are not the only variables to consider for those wishing to invest in futures. The above scenario regarding tensions between the U.S. and North Korea is another example. The release date of products and time a company would like to go public are just two of a multitude of other factors. These, along with other factors, are the reasons that brokers, such as RJO Futures brokers, are useful to you as an investor. Some things can’t be predicted, but if you’re investing in futures, you want to know your investment will be sound.
The last time Florida experienced damage to citrus crops that compared to Irma were the storms during 2004 and 2005. During that time, as the price of orange juice increased (as it is predicted to do so now), consumers eventually switched their drink of choice. Many landed on energy drinks as their alternative decision, a poor trade for a fresh glass of Vitamin C while you’re reading the morning news! For the Sunshine State, Brazil will be the saviors of the glass, and hopefully, it will be a smooth and temporary transition to, unfortunately, a pricier gallon of juice.
