Brazil's beef-tallow demand is increasing as US tariffs are hitting exports
Industry sources say that the use of beef-tallow in biodiesel in Brazil will increase due to a projected rise in domestic sales, which is aimed at increasing the production of the biofuel. They also note that a rise in the domestic use of beef-tallow would offset the likely decline in U.S. demand for Brazilian beef and its byproducts after tariffs were imposed.
Brazilian beef tallow exported boomed in July, thanks to a strong demand from the United States. Scot Consultoria, based in Bebedouro, said that the country shipped 290,800 tonnes in the period. This is nearly 91% the total amount exported by 2024. Scot Consultoria's data shows that the U.S. accounts for nearly 98% of all shipments.
Andre Nassar of Brazil's oilseed lobby Abiove said that a U.S. 50% import duty on some Brazilian products would make Brazilian beef-tallow sales in the U.S. "prohibitive". He noted that Brazilian demand could partially offset the impact of reduced exports to the U.S. by citing future purchases of beef tallow by biodiesel firms, including vertically integrated meatpackers who produce biodiesel, but do not make enough at home.
Abiove represents the soy processors, who produce 75% of Brazil’s biodiesel.
Brazil's beef-tallow exports increased after the sharp decline in U.S. herds. This resulted in a reduction of local production and shifted demand towards Brazilian suppliers.
Torres stated that it is possible that exports rose in July as exporters increased shipments before the tariff increase.
He said that these were palliative steps, and noted that the tariffs are now "an embargo", on exports of beef and byproducts.
Torres stated that Brazilian exporters can send their products to other countries to avoid paying the high tariffs.
Torres stated that the strategy could help increase Brazil's international customer base and keep shipping volume, while also expanding Brazil's exports. (Reporting and editing by David Gregorio).
(source: Reuters)