"Global prices of citrus are rising, partly because of crop rotation from oranges to sugar cane which is used for making bioethanol, leading to a plunge in supply," said Naoko Murakami, spokeswoman for Kirin Tropicana.
The area that was planted with oranges in key citrus producer Brazil has been declining in recent years despite solid demand, according to the Japan Fruit Juice Association.
"Because sugar cane is easier to grow and the prices are surging, reflecting demand for biofuel, farmers in Brazil are encouraged to change crops to sugar cane," said Sanosuke Tsuchiya, a board member of the association.
The harvested area of oranges in Brazil in the year from July last year fell to 722,600 hectares from 740,600 hectares the previous year, he said, even as demand for oranges continued to rise.
Other companies that have raised prices include Kewpie Co, Japan's top mayonnaise maker, and Nisshin Oillio, which hiked prices for rapeseed and soybean oil by about 10 percent in July.
FARMERS
"The rising global demand for corn to produce biofuels is one factor that has pushed up prices of soybeans, as farmers changed their crops from soybeans to corn that led to the shortage of soybeans," said Akira Ogawa, vice president of the Tokyo office of the American Soybean Association.
The Japan Oilseeds Processors Association (JOPA) added that prices of Canadian rapeseed were rising because the demand for rapeseed oil itself is rising.
"The rise in price of rapeseed reflects that Canadian oil manufacturing firms are actively reinforcing their oil refining capacity, targeting the market for biofuels," Yoshinori Komura, a JOPA official said.
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