Tallow price runs up on chemical demand

13 June 2007 21:25  [Source: ICIS news]

By Doris de Guzman

NEW YORK (ICIS news)--Good demand from the oleochemical and biodiesel markets has pushed prices for the feedstock tallow to historical highs, various industry sources said on Wednesday.

Prices for bleached fancy tallow (BFT) were quoted at around 33-34c/lb, or about double that of a year-ago.

“Continued good chemical demand pushed BFT prices higher while increasing demand for tallow in biodiesel production has also started providing market support,” said Mark Ash, oilseed analyst at the US Department of Agriculture (USDA).

“The $1/gal thermal depolymerization subsidy that Tyson-Conoco is seeking to earn is mainly responsible for driving tallow prices up. It is driving the soap manufacturers nuts,” said John Baize of consulting firm John Baize and Associates.

Another driver is the tightening supply of tallow, which is a by-product of the cattle rendering industry, a tallow producer said. US inedible tallow stock as of the end of April is down 20% compared to last year’s level, according to the Census Bureau.

The skyrocketing tallow cost already had already driven oleochemical companies to announce price hikes for tallow-based fatty acids, stearates, esters and surfactants this summer.

(Look for the tallow story in the 18 June issue of ICIS Chemical Business Americas)

By: Doris de Guzman
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