Q2 2024 fatty acids and alcohols outlook
This exclusive update delivers a concise overview of the fatty acids and alcohols markets, sharing insight into:
- Palm and lauric oil prices, analysis and outlook
- Glycerine quarterly contracts, supply & demand discussion and trade flow analysis
- Fatty alcohols quarterly outlook trends and in depth trade analysis
- Fatty acids price outlook, trade data and feedstock analysis
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Viewpoint: Tallow flows to pivot on US policy shifts
Viewpoint: Tallow flows to pivot on US policy shifts
London, 30 December (Argus) — Global tallow trade is facing shifting dynamics in 2026, driven by US policy. Washington's 50pc tariff on Brazilian imports — combined with the 45Z tax credit shifting eligibility next year to North American feedstocks and an unfinished plan to halve renewable identification number (RIN) credits for foreign feedstocks — have curbed tallow flows to the US and prompted sellers to seek alternative markets. Brazilian exporters with EU-compliant certification are positioning themselves for potential shipments to Europe early next year, while Australian suppliers are weighing opportunities in the face of high freight costs and volatile arbitrage conditions. In Europe, short-term dynamics point to continued price pressure. Surplus concerns stem from weaker US buying, expected Brazilian arrivals early in 2026, possible Australian flows, and steady domestic supply from seasonal slaughter. The EU's animal-by-products regulation divides tallow into three categories based on disease risk. Categories 1 and 2 — listed in Annex IX Part B of the Renewable Energy Directive (RED III) — benefit from double-counting in some countries and are mainly supplied for tallow methyl ester (TME) production. Category 3, excluded from Annex IX, remains a key feedstock for hydrotreated vegetable oil (HVO) Class III and sustainable aviation fuel (SAF) production but faces compliance hurdles: the Netherlands plans to apply a 0.5 factor from 2026, France plans caps on category 3 tallow from 2027, and Germany excludes category 3 entirely from its greenhouse gas (GHG) reduction quota. For now, Nordic countries, France, Italy and Spain continue to use a large share of category 3 volumes. But upcoming RED III transpositions into domestic law are creating uneven demand signals for 2026. Germany and the Netherlands are limiting category 3 usage, while southern and Nordic markets remain active buyers. Values may firm late in the first quarter next year on seasonal tightening and higher RED III targets. But near-term price pressure is likely to persist as buyers hold back amid uncertainty over imports. In Brazil, demand for tallow cooled in the second half of November on a seasonal drop in diesel consumption, but prices were high compared with Australia and too steep to support strong exports to other markets. The US used to be the main market for Brazilian tallow, taking 96pc of exports in 2024, according to the trade and development ministry. But exports dropped from September after the 50pc tariff on Brazilian imports took effect in August. If the tariffs stay in place, most of Brazil's tallow output in 2026 will be absorbed by the domestic biodiesel industry, which has already raised its tallow use from 5pc in July to 9.5pc in October. But exporters are eyeing Europe as an alternative. Although prevailing arbitrage economics are unfavourable, animal fats tend to track soybean oil in Brazil, and a fall in soy oil prices next year could open the trade. In Australia, the tallow market will likely stay volatile next year amid offshore policy uncertainty and potential domestic biofuel developments. US demand for Australian tallow has slumped since August as the feedstock loses tax credit eligibility from 2026. But reports the US EPA may indefinitely delay halving RINs for biofuels made with foreign feedstocks have renewed some US interest. Singapore will likely remain the most stable outlet for Australian tallow, taking 27pc of exports in the year to September 2025, Australian export data show. Further Asian growth hinges on delivered cost competitiveness with other feedstocks. Increased SAF production could also boost regional feedstock demand, including tallow, if pricing stays competitive. Australia's A$1.1bn ($730mn) Cleaner Fuels Programme will launch mid-2026. Industry hopes a federal biofuels mandate will follow, as previous aid has focused on supply grants. A mandate would provide certainty for investment, with guaranteed offtake typically required for final project decisions. Tallow supply should remain ample, with a stable herd, slaughter rates up nearly 10pc year-on-year, and feedlot capacity at a record 1.7mn head. By Anna Prokhorova, Grace Dudley and João Marinho Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Indonesia transfers more oil palm land to Agrinas
Indonesia transfers more oil palm land to Agrinas
Singapore, 26 December (Argus) — Indonesia has transferred another 204,000 hectares (ha) of palm plantations to state-owned Agrinas Palma Nusantara during a handover ceremony in Jakarta, the firm said on 25 December. The state reclaimed 897,000ha of land in this fifth phase of land transfer, with 77pc allocated for the restoration of protected forest areas. The remaining oil palm plantations were assigned to be managed by Agrinas. Following the latest transfer, Agrinas now manages about 1.7mn ha of land. The government has reclaimed a total of 4mn ha of forest area through its forest regulation task force, which was formed in February. An additional 6.6 trillion rupiah ($394mn) were transferred to the Indonesian ministry of finance, derived from Rp2.34 trillion in administrative forestry fines and Rp4.28 trillion from state losses caused by corruption cases, according to the press release issued by Agrinas. By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Indonesia allocates 2026 biodiesel blend volumes
Indonesia allocates 2026 biodiesel blend volumes
Singapore, 23 December (Argus) — Indonesia has allocated 15.6mn kilolitres to domestic biodiesel producers for its 2026 biodiesel-fossil diesel blending programme, the ministry of energy and mineral resources (ESDM) announced on 22 December. Total allocated biodiesel blend volumes will remain unchanged in 2026, with 7.45mn kl allocated to public service obligation (PSO) and 8.19mn kl to non-PSO (NPSO) firms. The ESDM this year allocated 7.6mn kl and 8mn kl to PSO and NPSO firms respectively under the 40pc biodiesel blend mandate. Indonesia reshuffled blend volumes earlier in December to shift an allocated 480,000 kl from PSO to NPSO fuel suppliers. But volume allocations will increase if Indonesia moves to a 50pc biodiesel blend mandate in the second half of 2026 . Fuel suppliers under the PSO receive subsidies from the oil plantation fund management agency (BPDP) to fund the difference between palm oil-based biodiesel and the indexed price of diesel, while NPSO fuel suppliers do not. By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: Tight lauric oils to support fatty alcohols
Viewpoint: Tight lauric oils to support fatty alcohols
London, 18 December (Argus) — Limited lauric oils supplies should maintain upward pressure on mid-cut fatty alcohol values into 2026. Lauric oils are a key feedstock used in the production of oleochemicals such as fatty alcohols and are primarily sourced from coconut oil (CNO) and palm kernel oil (PKO). Fatty alcohols are used in a variety of products including personal care, cosmetics, as well as in industrial applications. The fourth quarter of 2025 has been plagued with limited demand and uncertainty over the EU Deforestation Regulation (EUDR) implementation date, pushing lauric oils and mid-cut alcohols prices down. Mid-cut fatty alcohols prices hit a high of $3,100/t fob southeast Asia in early August, but prices have since declined to a low of $2,400/t in mid-December, according to latest Argus data. Tighter supply could lend support to CNO and PKO values in 2026, which could help to push mid-cut fatty alcohols prices up as costs are passed down. CNO supply has been flat for years, and new coconut tree planting in Asia will take a number of years to boost yields. PKO supplies will likely remain tight in Malaysia, even though palm oil output has risen in the country. The Malaysian Palm Oil Board (MPOB) expects palm oil production at around 19.5mn t this year, potentially hitting a record 20mn t. But PKO is a popular cocoa butter substitute and continues to command strong demand from the confectionary industry. In Indonesia, the world's largest palm producer, supplies of PKO could be curbed next year, following severe floods this and the government's palm plantation land seizure. Additional fatty alcohols capacity has come on stream in southeast Asia during the second half of 2025, and this additional demand is likely to pull on lauric oil supplies next year. Demand uncertainty On the demand side, European consumption has fallen significantly this year owing to the ongoing uncertainty surrounding the implementation of the EUDR, according to market participants. The regulation, originally slated to come into effect at the end of 2024, was pushed back to the end of 2025. But on 17 December, the European Parliament backed an additional one-year delay. This opens up the European market to more palm oil and PKO than would have been the case had the EUDR come into effect. This will likely put further upward pressure on mid-cut alcohols prices in 2026 as demand picks up from Europe. The EUDR delay postpones application of due diligence requirements by one year for large and medium operators from 30 December 2026. Small operators have until 30 June 2027. By Neha Popat Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.