Question

In: Economics

in the market for oranges in the united states if americans exports of oranges from florida...

in the market for oranges in the united states if americans exports of oranges from florida to canada increase then what will happen

Solutions

Expert Solution

Citrus fruits ranks first in global trade among all fruit's trade value. Sweet oranges represent approximately 70 percent of the citrus output.there are two main market of this fruits :

1) The fresh fruit market
2) The processed food market( largely juice)

Comercial Oranges are produced in around 140 countries but according to Food and Agriculture Organization , four countries represent 60 percent of world wide production : Brazil , US , India , Mexico.
If we talk about the US , it represents 14 percent of global production of citrus fruits . Florida dominates in Oranges production.in Florida's citrus production Orange's share is 83 percent .It consist 35 percent of the world market. More than 95 percent of Florida’s orange production is processed into juice. This juice consist essentially all of the US orange juice production.
So if america's export of oranges to Canada increases , it can create huge shortage of oranges and its juice in US because only 10 percent of Florida’s production is exported internationally . Despite being the world's second largest producer, the US only exports 10% of its orange production, while at the same time it also imports large amounts of oranges from Brazil. In such a situation, if they increase their exports, it can worsen the situation in the American market, the price of oranges in America will start to touch the sky.


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