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Last year's plethora of hurricanes caused plenty of disruptions in the transport of oil and natural gas from regions in the Gulf of Mexico, resulting in spikes of both commodities. But with the destruction of over 30% of the orange crop in Florida, the full effects of the hurricanes may yet to have been felt. Since Katrina hit on August 29th, 2005, prices for orange juice have risen 16% to 9 year highs. While this is a noticeable increase, it may just be the tip of the iceberg for a historic run in Fresh Concentrated Orange Juice (FCOJ). In 2004, orange juice contracts reached below $.60/lb, for the first time in decades, and the price of the fruit itself on the open market was less their values in the 1940's and 50's. With prices so low, few orange trees were planted in the early part of the 21st century, resulting in decreases in supply in 2005. Since reaching its low point about 18 months ago, this undersupply has caused prices to double to around the $1.20/lb mark. 90% of the United States' supply of Orange Juice comes from the Florida crop, which has just begun its harvest. With supplies this year expected to be much lower due to the wreckage of the hurricanes, the full effect of the orange disruption may soon be felt on the New York Board of Trade. The Commodity Investor believes an investment in Orange Juice futures may still prove very profitable , even at the $1.20/lb mark, because of the potential supply disruptions from this years decreased crop. A spike to the $1.50 mark is not out of the question.
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