Ireland Remains the Largest Supplier to the UK Tallow Market

IndexBox has just published a new report "United Kingdom: Tallow - Market Report. Analysis And Forecast To •••". Here is a summary of the report’s key findings.

The UK Tallow Market Remains Relatively Stable

From 2007 to 2016, the United Kingdom tallow market showed downward trend: it contracted notably over the first three years and then stabilised through to 2016, except for only a short-term peak of 2013. In 2016, the market reclined to its lowest level of ••• tonnes, •••% less than the year before and •••% less than the outset level. According to IndexBox estimates, in wholesale prices, the United Kingdom tallow market contracted to €•••, roller-coasting over the last five years due to price fluctuations. 

The Tallow Market Is Set to Pursue Modest Growth

Fuel and energy industry, food industry and, at a lesser extent, cosmetic industry constitute the key markets for animal fat consumption. On a global basis, expansion of these industries will remain the key driver of the tallow market. 

An increased attention to new sources of energy and to the impact of the automobile sector on the environment propelled biodiesel production. The consumption of animal fats is growing mainly due to an increase in biodiesel production. The decline in biodiesel production from 2007 to 2010 caused a decline in the UK tallow market. According to forecasts, in the medium-term perspective, biodiesel production will increase both in the EU and in the UK, which will stimulate the growth of consumption of tallow. 

Main competition to tallow and animal fats in general comes from vegetable oils, especially because the cost of vegetable oil production is much higher than that of animal fats, with animal fats being a by-product of the meat processing industry.

It is expected that in the future tallow consumption also will depend on the development of animal husbandry, as well as on the demand from other consuming sectors. In the medium term, population growth and rising income levels will contribute to the growth in demand for meat, which will lead to the growth in supply of tallow. On the other hand, food, cosmetic and oleochemical industries will also grow due to the same basic factors. 

Together, All These Conditions Will Contribute to the Growth in Consumption of Tallow

The performance of the market is forecast to begin a modest upward trend, growing with an anticipated CAGR of +•••% for the period from 2016 to •••, which is expected to bring the market volume to ••• tonnes by •••.

Tallow Output Decreased Slightly, but Generally Retains a Flat Trend Pattern

Tallow output in the UK totalled ••• tonnes in 2016, decreasing by -•••% from its peak level attained in 2015. The overall trend pattern, however, remained relatively flat from 2007 to 2016. Tallow is obtained by processing the by-products of meat industry, therefore, stable meat production continues to buoy the supply of tallow.

In value terms, however, the total output dropped to €•••, decreasing for the fourth consecutive year due to a downward trend of the producer prices. As tallow is widely used as a raw input for biodiesel production, the prices continue to be pressured by a recent decrease of oil and gas price, as well as a downward trend of prices for substitute oils for biodiesel production (mainly, palm oil).

Ireland Remains the Largest Tallow Supplier to the UK Market

The share of imported products in the country's consumption of tallow has increased significantly over the past nine years to •••% in 2016 (based on tonnes), which was due to a more pronounced reduction in domestic supply, compared with a slight decrease in imports. Ireland remains the major importer. Irish imports accounted for about •••% of the total market volume. Other importing countries were Denmark (•••%), the Netherlands (•••%) and Germany (•••%).

Ireland Strengthened Its Leadership in terms of Tallow Imports to the UK

The volume of total tallow imports into the UK totalled ••• tonnes in 2016, which equated to €••• in value terms. Over the period from 2007-2016, the volume of imports fluctuated somewhat wildly, bottoming out in 2010 at ••• tonnes and peaking in 2015 at ••• tonnes.

Ireland remains a key supplier of tallow into the UK, accounting for •••% of total imports in 2016. Denmark (•••%) and the Netherlands (•••%) lagged far behind in terms of the volume of imports, followed by Germany (•••%) and Belgium (•••%). 

From 2007 to 2016, Denmark (+•••%) posted the highest rates of growth in terms of imports, while supplies from Ireland increased by on average    -•••% per year. By contrast, imports from the Netherlands and Germany decreased at average annual rates of -•••% and – •••%, respectively, from 2007-2016. Consequently, the share of the Netherlands (-••• percentage points) and Germany (-••• percentage points) in terms of total imports decreased from 2007-2016. At the same time, the shares of Ireland and Denmark attained +••• percentage points and +••• percentage points, respectively, over the same period. 

The Netherlands Emerged as the Major Destination of Tallow Exports from the UK

The UK exported ••• tonnes of tallow in 2016, which equated €•••. In physical terms, the volume of exports decreased by -•••% from the previous year – tallow is widely used for production of biodiesel, the demand for which has slowed down due to the fact that traditional fuels became significantly cheaper.

The UK exports amount to approx. •••% of the total output in the country, therefore, demand from export markets provide noticeable support to the tallow industry. Therefore, the decline in exports led to a decrease in production volumes, which, however, did not have a significant impact on the domestic market.

In 2016, the Netherland (•••% of the total exports) constituted the main destination for tallow exports, followed by Belgium (•••%), Germany (•••%), Ireland (•••%) and France (•••%). The Netherlands (+•••% per year) emerged as the fastest-growing export destination, given the fact that tallow is widely traded at the country’s exchanges in Rotterdam. Therefore, the share of the Netherlands in terms of the total exports increased from •••% in 2007 to •••% in 2016; the share of Germany, meanwhile, decreased by -••• percentage points to •••% in 2016. The shares of the other countries remained relatively stable over the period under review.

Do you want to know more about the UK tallow market? Get the latest trends and insight from our report. It includes a wide range of statistics on

• tallow market share
• tallow prices
• tallow industry
• tallow sales
• tallow import
• tallow export
• tallow market forecast
• tallow price forecast

Source: United Kingdom: Tallow - Market Report. Analysis And Forecast To •••