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Nine shipments of orange juice from Canada and Brazil said to contain traces of an illegal fungicide was detained by U.S. health regulators on Friday. The health regulators also denied industry calls to modify the manner of testing for the banned substance.
According to the U.S. Food and Drug Administration, carbendazim will continue to remain illegal for citrus regardless of the volume. U.S. and Brazil industry groups have asked the FDA to reconsider its position on the fungicide, which is widely used in other countries to fight combat blight blossom and black spot, a kind of mold that thrives on orange trees.
The FDA began testing on January 4 for the fungicide after a notice from Coca-Cola, causing orange juice futures to reach record levels as traders anticipate an extended disruption to supply.
After the FDA announcement on Friday, orange juice futures jumped nearly 3 percent.
Traders are also anxious that the fungicide testing would affect demand adversely if such action will result in higher prices for consumers or spark health risk fears.
Around half of the entire U.S. imports are composed of Brazilian orange juice.
The FDA has been requested by the U.S. Juice Products Association and CitrusBR of Brazil to increase the amount of the fungicide, carbendazim, it allows into the country by increasing the legal limit for frozen concentrated juice.
On Friday, Christian Lohbauer of CitrusBR said to reporters, “If this were considered, the whole problem would have been already resolved.”