What is Orange Juice?
The invention of frozen orange juice (which is used in concentrate) opened up the international market to Orange juice, with Brazil making up 80% of the international market. Such events like Hurricanes make for good reason to be able to hedge investments on the futures market. During Hurricane Katrina, the price of Orange Juice went from approximately $0.9 to $1.98 per pound.
Uses of Orange Juice
Orange Juice is, as you can expect, comes from the juice of an Orange fruit. The juice is consumed by people around the world for it’s health benefits. Some research has suggested that orange juice can help support the immune system due to the large amount of Vitamin C found in the fruit.
Other health benefits include:
- Can help fight the signs of aging
- Boost cellular repair
- Detoxify the human body
- Improve circulation
- Improve Blood Pressure
- Reduce inflammation
- Lower cholesterol
Risks of Orange Juice
Like any futures contract, there is always the possibility that the underlying asset i.e. Orange Juice will move in the opposite direction to which you hold your contract. For example: you have taken a long position (expecting the price of Orange Juice to rise), if this were to happen and the Orange Juice fell in price, your long position in Orange Juice will decrease in value.
Cultivation risks associated with growing Oranges such as low rain falls, insects, disease, temperature, wind and solar radiation. All these factors can affect the level of output a farm is able to produce hence affecting the price of the Orange Juice.