Tuesday, January 24, 2012

Hey, who’s been putting fungicide in my OJ?

Brazil, apparently. The price of orange juice hit an all-time high this week because of a flap over US imports of OJ from Brazil. The culprit: the chemical carbendazim, a chemical used to kill fungus that in high enough quantities has been linked to infertility.

The US FDA reported that it found low levels of it in Brazilian OJ, and began inspections of orange juice concentrate imported from all over the world for traces of the carbendazim, which is banned in the United States. That could lead to a ban on imports of orange juice from Brazil, which has got markets all in a tizzy.

"Florida doesn't produce enough orange juice for the entire U.S.," said Liberty Trading Group President James Cordier told The Wall Street Journal. "Everyone's going to be crunching numbers trying to figure out what we're going to do without Brazilian orange juice."

The exports are worth $2 billion per year to Brazil, which provides a whopping 85 percent of the world’s total exported orange juice, according to CNN.

Here’s what I think this so interesting in this case – this chemical is legal in Brazil. I’m surprised this sort of cross-border pesticide dispute doesn’t come up more often, because pesticides are getting more common and their usage increasingly intensive. Orange juice crops are subject to a number of pests including one called greening, or molds such as blackspot that can wreck a crop. The issue of GMO rarely turns into a cross-border environmental regulation dispute, even though about 70 percent of Brazil’s soy is now grown with genetically modified seeds. Is this the new ground for environmental protectionism? My guess is these disputes will become more frequent. Crops are being grown more intensely and closer together, which means greater levels of monoculture, which means more diseases are coming into the fore or ones that we didn’t pay much attention to will all of a sudden gain new relevance, which means new forms of pesticides.

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