Brazilian tallow exports slow as US tariffs curb forward negotiations: Secex

Brazilian beef tallow exporters are struggling to place cargoes for October and November, as US import tariffs keep the arbitrage to the Gulf Coast closed and European demand remains limited, despite high August and September shipment volumes from deals concluded earlier in the year.

Brazil exported 231,800 mt of beef tallow in the first eight months of 2026, down 34.9% from 356,033 mt in the same period of 2025, according to Secex data released Sept. 4. However, it remains higher than the corresponding 2024 period, which reached 226,708 mt.

August exports totaled 40,634 mt, down 37.2% from 64,730 mt a year earlier, but remained elevated compared with other months in 2026.

Of the August total, 97% is directed to the US market, as participants said most of the volume had been negotiated in July, before the 37.5% tariff took effect.

Similarly, a vessel lineup seen by Platts showed more than 33,000 mt scheduled for September loading.

Negotiations for October and November loadings, however, have been slow. While Brazil's meatpacking sector has sought tariff relief from the US government for beef imports, market participants said tallow has not yet been included in those discussions.

The US remained an important destination for Brazilian tallow in 2026. US Census data, available through July, showed imports of 115,008 mt gross weight from Brazil, with 66,257 mt entering through Beaumont, Texas, and 24,192 mt through New Orleans, Louisiana. Together, the two US Gulf Coast ports accounted for 78.6% of Brazilian arrivals during the period.

Platts, part of S&P Global Energy, assessed Tallow delivered US Gulf Coast at 81 cents/pound, or approximately $1,786/mt, on Sept. 9.

On the same day, Platts assessed beef tallow FOB Santos price for 31- to 60-day loading at $1,170/mt. Applying the current 37.5% additional US tariff to the customs value would add about $439/mt, bringing the tariff-adjusted value to approximately $1,609/mt before ocean freight, insurance and other import costs. US Customs generally excludes international freight and insurance from the value on which ad valorem duties are assessed.

That leaves a spread of roughly $177/mt between the tariff-adjusted FOB Santos value and the delivered US Gulf Coast assessment before freight and other costs, which market participants said remains insufficient to reopen the arbitrage.

Expectations for stronger US renewable feedstock demand have provided some support to the outlook. On Aug. 31, the US Environmental Protection Agency said it would propose reallocating 100% of the difference between projected and actual volumes exempted under 2025 small refinery exemptions into the 2026 and 2027 Renewable Volume Obligations. Still, market participants said it remains unclear whether stronger feedstock demand would be sufficient to offset the tariff disadvantage for Brazilian tallow.

European negotiations have also been slow. Under the EU Renewable Energy Directive III, animal fats classified as Categories 1 and 2 are listed in Annex IX Part B, giving them greater compliance value in several European biofuel markets. Category 3 animal fat, which accounts for the bulk of Brazilian beef tallow exports, is not included in Annex IX and therefore does not benefit from the same treatment.

As a result, Category 1 and 2 material can command premiums in European markets where Annex IX feedstocks receive favorable treatment, while Brazilian Category 3 tallow has struggled to achieve equivalent values, limiting Europe's ability to replace lost US demand.

Still, traders and brokers expect export discussions to pick up from the second half of October as Brazilian slaughter rates increase. Market participants expect meatpackers to accelerate slaughter toward the end of the year for November-December beef shipments timed to arrive in China after the country's 2027 import quota opens in January.

"The slaughters will return, but now with low volumes for exports," a local renderer said, pointing to expectations of higher domestic tallow availability alongside weaker export demand.

Higher supply, however, may not necessarily pressure domestic prices. Brazilian tallow negotiations continue to closely track soybean oil, which has strengthened amid higher soybean origination costs and pressured crush margins.

"Tallow prices should keep going up, tracking soybean oil, even with more animal fat available," the renderer said.

With both US and European markets offering limited opportunities, traders have also begun testing alternative destinations. Platts confirmed a Brazilian tallow shipment to Singapore for use as a feedstock for advanced biofuel production.