Germany tallow prices hit record highs amid meat concerns

26 January 2011 16:13  [Source: ICIS news]

LONDON (ICIS)--Raw tallow prices in Germany have hit record highs amid concerns over contaminated meat which have led to reduced levels of slaughter and tight animal fat supplies, a tallow-based fatty acid producer said on Wednesday.

Tallow prices in Germany have reached €800-850/tonne ($1,096-1,164/tonne) FD (free delivered) NWE (northwest Europe), compared with €750-800/tonne in France and Italy.

“This is higher than the peak of 2008… these are record high prices,” said the producer.

The producer said that traces of dioxin, a group of potentially carcinogenic toxins, had reportedly been found in meat from numerous farms in Germany. This had caused both domestic and export demand to fall and had resulted in a reduction in the number of animals slaughtered.

Tallow, or rendered animal fat, is generally produced as a by-product of the meat industry and is used in the production of various products, including fatty acids and biodiesel.

In addition to the tightness in Germany, European tallow prices were being pushed up by the ever-increasing cost of vegetable oils, which often compete with tallow as a feedstock material.

“Biodiesel producers usually use rape [seed oil], but with rape prices so high they are using tallow instead. Rape is so expensive I don’t think you could even sell the biodiesel, it’s not economical,” said the producer.

This was confirmed by sources in the biodiesel market, who believed rapeseed methyl ester biodiesel producers were probably operating at a loss.

Tallow-based fatty acids prices for the first quarter of 2011 increased by 5-8%, which sources attributed to the rising cost of feedstock raw tallow.

($1 = €0.73)

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By: Ross Yeo
+44 208 652 3214

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