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Abstract
Trades between orange growers and orange juice processing companies in Brazil have been characterized
by conflicts, culminating in accusations of breach of contracts and cases of anti-trust violations in the Council for
Economic Defense (Cade). Recently, attempts to create a council, called Consecitrus, have failed, evidencing that
conflicts remain. Due to the evident fragility of the transactions between these agents, the aim of this study is to
investigate whether there is indication of market power use by the processing companies in their dealings with
growers. For this, the evolution of gross margins and price transmission are analyzed. The analysis of the margins
revealed that the gains achieved by processors are significantly higher when the revenue obtained with the sale
of byproducts is added to the juice revenue. It was found that the margins are underestimated when considering
only the leading products in its calculation. The analysis of price transmission showed that processing companies
transfer price decreases for growers in the short-term and an asymmetry in the long-run. Therefore, there is an
evidence of the market power use by orange juice processing companies, and this practice can generate cumulative
losses for growers, since there is an asymmetry in the long-term with less than proportional price recovery.