Lang
Brazilian tallow prices have seen an increase, driven by tighter domestic supply and limited export activity, according to recent Fastmarkets assessments. Bleachable fancy tallow, with a maximum 3.5% free fatty acids (FFA), CIF São Paulo (including a 12% tax), was assessed at 6.10-6.30 reais per kilogram ($1.17-1.21), an uptick from the previous week's 5.90-6.05 reais per kilogram ($1.13-1.16). Offers for this grade were reported between 6.40-6.65 reais per kilogram ($1.24-1.28), while bids ranged from 5.95-6.00 reais per kilogram ($1.14-1.15). A deal was heard at 6.15 reais per kilogram ($1.18) during the assessment period.
Fastmarkets also reported an increase in the assessment of bleachable fancy tallow, maximum 5% FFA, CIF São Paulo (including 12% tax), a key benchmark for Brazil's biodiesel sector. This grade was assessed at 5.90-6.10 reais per kilogram ($1.13-1.17), up from 5.75-5.95 reais per kilogram ($1.10-1.14) week-on-week.
The primary driver for the tighter supply is a decline in cattle slaughter rates observed throughout July, with several meatpackers either temporarily halting operations or implementing collective leave programs. Market participants attribute this slowdown to two main factors: Brazil nearing its annual beef export quota to China, and the impending September 3 deadline after which Brazilian animal protein exports to the European Union are expected to face restrictions due to sanitary compliance issues.
Despite the reduced domestic availability, animal fats have maintained their competitiveness relative to soybean oil within the Brazilian domestic market. This has helped sustain a moderate buying interest from the biodiesel sector.
On the export front, prices for tallow with a maximum 15% FFA, FOB Santos, remained unchanged week-on-week at $1,120-1,160 per tonne. No new bids, offers, or deals were reported during the assessment period. Market sources indicated that origination costs for previously booked shipments were approximately $1,120 per tonne. Participants noted a lack of active interest in new export cargoes following the September shipment deals concluded the previous week, as exporters were reportedly well supplied in the ports.
Source: Fastmarkets