U.S. won't allow more fungicide in orange juice - FDA

By Anna Yukhananov

WASHINGTON (Reuters) - The U.S. Food and Drug Administration on Thursday declined to raise the levels it will accept of an illegal fungicide commonly used in the Brazilian orange juice industry.

Brazilian and U.S. juice industry groups had asked the FDA to allow higher levels of the fungicide, carbendazim, until June 2013 to allow the industry time to switch to another option.

Carbendazim is illegal on all citrus in the United States, but commonly used in Brazil, the world's top orange juice exporter, to combat mold on orange trees. It is permitted in juice imports to the European Union, Brazil's biggest buyer.

A Brazilian juice industry source, who declined to be named, producers would have to export the juice as non-concentrate, as they have been doing since FDA tests began in January, until the chemical is eliminated from Brazilian juice stocks.

"We decided to export only not-from-concentrate until this was resolved, so it will continue that way," he said.

"By the end of the year it is probable that things will be back to normal and we will be shipping concentrated juice to (the U.S.) again," he said.

The source said Brazilian juice companies would have to review supply contracts for concentrated juice with U.S.-based importers.

Orange juice futures have been on a rollercoaster ride since the FDA began testing orange juice imports after Coca-Cola alerted the agency to the presence of carbendazim, which was banned in the United States in 2009.

(Reporting by Anna Yukhananov and Chuck Abbott; Additional reporting by Peter Murphy in Brasilia; Editing by David Gregorio)