Tallow prices steady at $680/t

Palm oil market to keep tallow rates in check

Analysis
Reports suggest the recent stabilisation of the tallow market has been underpinned by the resumption of steady trade in the oleo and industrial markets, particularly with traditional tallow users such as China, Pakistan and Nigeria.

Reports suggest the recent stabilisation of the tallow market has been underpinned by the resumption of steady trade in the oleo and industrial markets, particularly with traditional tallow users such as China, Pakistan and Nigeria.

Aa

After months of price pressure, rendered beef products such as tallow have finally started to stabilise.

Aa

AFTER months of price pressure, rendered beef products such as tallow have finally started to stabilise.

August prices for one per cent free fatty acid tallow averaged $680 a tonne, up $35 on last month’s prices, according to a Meat and Livestock Report prepared by Southern Downs Management Services director Dennis King, Warwick. 

Even so, this average was still $225/t below the same time last year.

Mr King said Australian tallow prices had been under significant downward pressure since the beginning of the year.

MLA have reported this had been largely due to the downturn in global palm oil prices and lack of demand from Singapore for biofuel production, as biofuel mandates stipulated in the US remain unchanged.

“Palm oil prices have declined following an increase in global production, as the El Nino conditions affecting south-east Asia (the largest palm oil production region in the world) eased,”  Mr King said. 

“Additionally, competition from the US have pressured tallow prices, as US cattle slaughter recovers and soybean production increases in North and South America.”

During August, Mr King said prices for 4pc FFA tallow dropped 25pc from year-ago levels, averaging $624/t ex-works and represents a 37pc decline from where prices peaked in February.

“Meanwhile, 2pc FFA tallow eased 26pc from August last year, averaging $642/t ex-works,” he said.

“However, the downward slide seems to have slowed in August, with 4pc FFA prices for the month remaining steady with July levels.

“In August, 2pc FFA registered a 2pc decline from July, while 1pc FFA recorded a 5pc increase from the previous month.”

Reports suggest the recent stabilisation of the market has been underpinned by the resumption of steady trade in the oleo and industrial markets, particularly with some more traditional tallow users such as China, Pakistan and Nigeria.

MLA forecast Australian tallow prices were expected to remain in check with the global palm oil market.

Recent reports from the Indonesian Palm Oil Producers Association indicate that, together with the Indonesian government, development will focus on lifting the productivity of privately held palm plantations (which account for 40pc of palm oil producers in Indonesia) to increase production.

Meanwhile, a restriction in meat and bone meal supply has resulted in prices rallying slightly in August. Prices for meat and bone meal with 50pc protein averaged $642/t, $105/t above the same time a month ago.

The lips may be weak, but lungs are bullish

JUST like the cattle market, beef offal prices have taken a hit during the past month across most categories.

The exception to this trend has been rumen pillars, which have been firm, and lungs which have been described as bullish according to a Meat and Livestock Australia report prepared by Southern Downs Management Services director Dennis King, Warwick. 

Mr King said liver prices averaged 100 cents a kilogram, down 16c/kg month-on-month but remained 10c/kg above year-ago levels. Halal livers eased 22c/kg month-on-month and 5c/kg year-on-year, with sales averaging 113c/kg.

Breaking down some more of the beef offal trends, omasum was not reported for the month but halal omasum strengthened 30 cents a kilogram month-on-month to average 423c/kg, but was 48c/kg lower than a year ago, Mr King said.

“Halal tripe pieces averaged 308c/kg to be 50c/kg easier month-on-month, however were up 20c/kg year-on-year,” he said.

“Non-halal product averaged 320c/kg, which was 8c/kg below last month. 

“Honeycomb tripe eased 21c/kg month-on-month, averaging 593/kg, while the halal product was reported to average 615c/kg, down 85c/kg from last month.”

The head offal products were cheaper month-on-month. Mr King said halal head meat averaged 408c/kg which was 37c/kg lower than last month. 

Cheek meat was 1c/kg lower compared to the corresponding period last year, averaging 643c/kg, but eased 53c/kg from July levels. 

Lip export prices to the US and Mexico eased 4c/kg month-on-month, averaging 360c/kg, but remained 115c/kg higher year-on-year. 

Halal lips averaged 348c/kg which was up 2c/kg month-on-month and 97c/kg above year-ago levels. 

Aa

From the front page

Sponsored by