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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US tariffs to cut Brazil's tallow exports
US tariffs to cut Brazil's tallow exports
Sao Paulo, 29 July (Argus) — New US tariffs are expected to curb Brazilian beef tallow exports to its largest overseas market, increasing domestic availability and potentially channeling more supply into biodiesel production. Brazilian beef tallow now faces a combined 37.5pc import tariff into the US, comprising a new 12.5pc duty imposed by the administration of President Donald Trump on 24 July and an existing 25pc tariff on Brazilian imports effective since 22 July. The feedstock has lost its competitive edge in the US Gulf coast market, which is a major demand center. Including beef tallow costs, freight costs for cargoes of up to 5,000 metric tonnes (t), the recently imposed tariffs and the value generated by the 45Z clean fuel production tax credit — which could be viewed as an additional cost since it only applies to US domestic feedstocks — imported Brazilian tallow carries an effective cost of around $1,936/t, according to Argus calculations. By comparison, US tallow at the US Gulf coast is available at roughly $1,700/t. Market participants expect only limited volumes of beef tallow to continue flowing to the US, primarily to producers that can take advantage of duty drawback provisions. These provisions allow some renewable diesel and sustainable aviation fuel (SAF) producers to recover duties paid on imported feedstocks when the finished fuel is subsequently exported to destinations such as Canada, Europe and other international markets. 1H export drop Brazilian tallow exports had fallen by approximately 40pc to 141,000t in the first half of 2026 from the same period in 2025, according to trade ministry Mdic data. This reflected the impact of previous US import tariffs, which created market uncertainty and disrupted trade flows to the product's primary export destination. Brazilian beef tallow prices are trending downward as export demand weakens following the closure of the US arbitrage. Further losses, however, are likely to be limited by production costs and slower cattle slaughter rates after Brazil filled its beef export quota to China, reducing tallow output. A drop in the price of the feedstock material will be insufficient to reopen the arbitrage opportunity to the US in the short term, according to traders. Falling beef tallow prices are likely to boost demand from biodiesel producers with the flexibility to process waste-based feedstocks. Tallow in Brazil's central-western Mato Grosso state is currently priced at R5,150 ($1,009)/t, a discount of R625/t to soybean oil, according to Argus indicators published on 24 July. But demand for the biofuel is not reacting as expected, given the backdrop of the conflict between the US and Iran, which has driven up fuel prices and altered economic dynamics worldwide. External demand With Brazil facing the highest tariff burden, US biofuel producers could increasingly turn to alternative sources of tallow, including Australia, New Zealand, and potentially Europe and other South American countries. More favorable tariff treatment for Asian suppliers could also support continued imports of used cooking oil (UCO) into the US, displacing some demand for tallow. But UCO arbitrage opportunities have narrowed in recent weeks, as the spread between origin markets and the US Gulf coast has become less attractive than it was in June. The US Environmental Protection Agency (EPA) finalized its record-high 2026 and 2027 biomass-based diesel blending mandates in March, covering renewable diesel, biodiesel, and SAF. The 2026 mandate represents a 60pc increase from the previous year, with targets set at 9.07bn renewable identification numbers (RINs) for 2026 and 9.20bn RINs for 2027. The announcement removed much of the uncertainty that had weighed on the industry throughout 2025 and provided a clearer demand outlook for biofuel feedstocks in the US. The higher mandates translated into stronger demand for feedstocks such as tallow on the US Gulf coast, where prices climbed to a record high of $1,995.81/t on 3 June. Elevated domestic prices opened arbitrage opportunities for imports during the first half of the year, supporting a recovery in overseas shipments. Although US tallow imports have yet to exceed their historical highs in 2026, they have rebounded significantly from lower levels early in the year. The recovery had boosted confidence among overseas suppliers, who expected import demand to continue strengthening through the remainder of 2026. But the new tariff measures have added fresh uncertainty to that outlook, raising questions about future trade flows and the competitiveness of different supplying regions. This has renewed attention on Europe as a potential destination for Brazilian tallow. European traders do not expect the US tariffs on Brazilian tallow to result in a significant increase in imports into the EU. Market participants had explored diverting Brazilian volumes to Europe when US tariffs reached 50pc in the second half of 2025, but shipments were limited, partly because veterinary approvals, certification requirements and border controls restricted market access. As a result, only small volumes arrived in early 2026 despite concerns over a potential influx. The latest 37.5pc tariff is therefore unlikely to change trade flows materially. Although Spain's RED III implementation is expected to support category 3 demand from 2027 by rewarding greenhouse gas emissions savings and leaving category 3 outside the 1.7pc Annex IX Part B cap, traders said freight costs, high energy prices and regulatory hurdles continue to prevent a viable Brazil-Europe arbitrage. Some market participants instead expect lower US imports from Brazil to support European exports to the US. Most European suppliers to the US do not expect an immediate impact from the latest tariff measures, noting it is too early to assess any shift in trade flows. Under EU animal-by-product rules, tallow is classified into categories 1, 2 and 3. Categories 1 and 2 are recognized as waste feedstocks under RED III Annex 9 Part B, while category 3, although not listed under Annex 9, remains an established biofuel feedstock. Typically, lower-grade category 3 tallow with 10-15pc free fatty acid (FFA) content is exported to the US, while higher-quality material with 5pc FFA or below is consumed within Europe. By Natalia Dalle Cort, Beatriz Pacheco, Anna Prokhorova and Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Indonesia sets biodiesel production volumes for B50
Indonesia sets biodiesel production volumes for B50
Singapore, 29 July (Argus) — The Indonesian ministry of energy and mineral resources (ESDM) has today allocated production volume targets to domestic biodiesel producers to implement its 50pc fossil diesel-biodiesel blend (B50) mandate, according to a document seen by Argus . ESDM has allocated a total of 16.7mn kilolitres (kl) across 26 biodiesel producers for 2026 to fulfill the B50 mandate, up from 15.6mn kl allocated at the start of the year for its original B40 target. Biodiesel producers had been awaiting updated volume allocations under the new B50 target for most of July , despite the mandate officially taking effect at the start of the month . Of the total allocated volume, the ministry has instructed producers to supply 8.2mn kl of subsidised biodiesel volumes to the public service obligation (PSO) sector — targeted at public transportation, public services, agriculture and micro-enterprises. The remaining 8.5mn kl must be supplied to the non-PSO sector — including commercial industries, private transport, general mining, manufacturing, and power plants. Indonesian plantation fund management agency BPDPKS funds the price gap between biodiesel and fossil gasoil using revenue from export levies on palm oil and related products, for biodiesel delivered to the PSO sector. It delivers the funds to biodiesel producers after they supply biodiesel to fuel distribution companies at the cost of regular gasoil. Fuel distributors then supply blended biodiesel and gasoil to consumers. By Malcolm Goh Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
CTO fire seen having no long-term US TOFA impact
CTO fire seen having no long-term US TOFA impact
London, 21 May (Argus) — US pine chemicals producer Mainstream Pine Products expects a recent fire at its crude tall oil (CTO) fractionation site in North Charleston, South Carolina, to have a limited impact on US supply of tall oil fatty acid (TOFA). "We do not expect major effects on the US TOFA markets, and no long-term effects. This incident occurred during a planned outage, so inventories had been built in advance," the company told Argus . Repairs will "take weeks, not months", it added. The 12 May fire was contained to part of the refinery. There was no damage beyond the affected column, the company said. Local reports indicate the North Charleston Fire Department is investigating the cause. There has been no immediate disruption to TOFA supply, one buyer said. And domestic availability is sufficient to meet demand, according to market participants. Mainstream supplies TOFA to the domestic market alongside US-based specialty polymers and pine chemicals producer Kraton. Mainstream supplies certain higher-rosin grades, while its TOFA volumes are smaller than Kraton's, participants said. The North Charleston plant, formerly owned by Ingevity , has CTO refining capacity of 110,000-120,000 t/yr, according to market estimates. Mainstream completed the acquisition on 1 January this year. TOFA is one of the fractions obtained from CTO distillation. By Leonardo Siqueira Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Indonesia to route key commodity exports via state firm
Indonesia to route key commodity exports via state firm
Singapore, 20 May (Argus) — Indonesian president Prabowo Subianto today announced that the government will require exports of key commodities to be routed through a state-appointed company, in a move that could tighten state control over flows as authorities grapple with fiscal pressures and a weakening currency. The policy will initially target palm oil, coal and ferrous alloys, Prabowo said in a parliament session on 20 May. The market awaits details of the policy, but under the broad plan, export sales would be channelled through a state-owned enterprise (BUMN), which would act as the sole counterparty to overseas buyers. Prabowo said a state-owned enterprise will act as a "marketing facility" which helps the state strengthen monitoring of export transactions and fight against under-reporting the value of exports in the country. The move is also to ensure that exporters do not "run away" from requirements to keep export proceeds in the country for at least one year, he said. Exporters of national resources, except for oil and gas, are required to place 100pc of the foreign currency proceeds into a special deposit account of a national bank for at least 12 months, according to a government regulation imposed in March 2025. Indonesia has lost about $908bn over 1991-2024 because of export under-invoicing, Prabowo said. "This will optimise our tax revenues and government proceeds from sales of key commodities and our natural resources," said Prabowo. "We don't want our exports to be the cheapest because we don't dare to control our own resources." The shift signals a move towards centralised trade management that could help the state capture more foreign exchange earnings and improve revenue collection. But it also risks disrupting established supply chains and complicating trade flows with international buyers. The benchmark Jakarta Composite Index, representing 913 companies spanning from sectors including commodities and energy, extended losses because of the announcement, dropping by as much as 2.4pc before trimming some intra-day losses. The index is down by 27pc from the start of the year. The phased roll-out of the scheme will begin in June and last through August, when exporters will have to gradually shift contracts, transactions and payment flows to BUMN or state-owned enterprises (SOEs), while still handling parts of the export process. The aim of the phased roll-out is to ensure that SOEs gradually take over the international sales of the commodities. The system is set to move to full implementation from September, with the SOEs assuming end-to-end control of transactions. This could include contract negotiation, documentation, shipping co-ordination and receipt of export proceeds, effectively positioning state firms as the primary interface between Indonesian producers and global markets. The Indonesian coal mining association (APBI) did not immediately respond to a request for comment. By Saurabh Chaturvedi and Nadhir Mokhtar Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.