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Increased Testing, Ban on Imports, Possible Price Increases in Wake of OJ Contamination

January 11, 2012

U.S. health officials have vowed to increase testing efforts following the detection of low levels of fungicide in orange juice, CBS News and the Associated Press (AP) reported on Wednesday.

The U.S. Food and Drug Administration (FDA) sent a letter to members of the juice industry Monday, noting that an unidentified company had contacted them in December to report low levels of the fungicide carbendazim both in their own orange juice and in that produced by competitors.

According to CBS and the AP, FDA officials have said that they are not concerned about the safety of the juice, but have nonetheless promised to test more rigorously in order to make sure that the contamination is not a problem. They also noted that orange juice products currently on store shelves will not be pulled since the federal agency does not believe there to be any harm in consuming them.

“Fungicides control fungi or fungal spores in agriculture,” CBS and the AP said. “Although it is not approved for use on citrus in the U.S., carbendazim is used in Brazil, which exports orange juice to the U.S. and is the biggest producer of oranges in the world, according to the USDA.”

“An FDA spokeswoman said the testing found levels up to 35 parts per billion of the fungicide – far below the European Union’s maximum level of 200 parts per billion,” they added.

As a result of the fungicide contamination, American regulators have opted to put a halt on shipments of imported orange juice from all other countries, Bloomberg News said on Wednesday. They have also promised to destroy and/or prohibit products if they test positive for even trace levels of carpendazim, which has been linked to an increase risk of liver tumors in animals.

FDA spokesperson Siobhan DeLancey told Bloomberg in an email interview that if the chemical is found, the agency would inform the public and “take the necessary action to ensure that the product is removed from the market,” she said in an e-mail.

The fungicide has been traced back to oranges produced by Brazil in 2011.

“Brazilian orange juice is safe and always has been,” Dan Schafer, a spokesman for the Atlanta-based Coca Cola, the parent company of the Minute Maid brand of juice-related products, told Bloomberg via e-mail on Wednesday. “Second, this is an issue that impacts every company that produces products in the U.S. containing orange juice from Brazil.”

Concerns that such a ban might occur resulted in orange juice futures to reach an all-time high on Tuesday, Reuters had reported early Wednesday morning.

“Orange juice futures jumped almost 11% to an all-time high on the news,” the news agency said. “The orange juice market is particularly prone to volatility because of its tiny size compared to oil and other major commodities.”

“It was not immediately clear whether there would be a related increase in orange juice prices for consumers, as that would depend on how long futures stay high and whether this results in a shortage of orange juice shipments into the United States,” Reuters added.

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Source: RedOrbit Staff & Wire Reports



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