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An US executive order issued late on Wednesday exempted a list of Brazilian products and confirmed the 50% tariff on tallow, effective for products shipped from August 5. The news prompted speculation among market participants, but there was no immediate price reaction.
Fastmarkets assessed the export price for tallow, max 15% ffa, fob Santos unchanged week on week at $1,040-1,080 per tonne on Thursday.
No export deals were heard for September deliveries, but trading talks were held and lower bids from exporters for origination were reported before the executive order was signed.
Market participants noted that tanks at Santos and Rio Grande ports continued to receive tallow in the week, partly to accomplish contracts scheduled for August.
Fastmarkets heard a week earlier that three Brazilian companies sold 36,000 tonnes to US sustainable aviation fuel (SAF) producers using the US’s duty drawback system, which allows them to get back most of the tariff paid, as long as the finished product is exported.
“Previously agreed deliveries and contracts that had not been suspended in hopes the tariff would be eased will potentially keep the tallow market firm in August,” one source said.
It was uncertain whether new deals would be reached with the US under the 50% tariff or whether unsold volumes could be delivered to other destinations. Some exporters were still trying to find ways to offer the feedstock to Europe, sources said.
Some speculated on potential shipments to Argentina’s hygiene and oleochemical market, considering the country could export more tallow to the US if trading flows from Brazil decrease permanently.
The tallow market is one of the most affected by the tariff against Brazil, as nearly 97% of the exported volume has been sent to the US in 2025, customs data showed.
Fastmarkets assessed the price for bleachable fancy tallow, max 3.5% ffa, cif Sao Paulo (inclusive of 12% tax) unchanged week on week at 6.20-6.50 Reais ($1.11-1.16) per kg.
Meanwhile, the main reference for Brazil’s biodiesel sector, bleachable fancy tallow, max 5% ffa, cif Sao Paulo (inclusive of 12% tax) was assessed at 6.10-6.30 Reais per kg, up from 6.00-6.20 Reais per kg a week earlier.
Sources told Fastmarkets that despite a recent decline in cattle slaughter in July following the US tariff announcement, production levels remained historically high.
That said, tallow supply in the domestic market remained reportedly tight, but not due to a real shortage, a source said.
“It seems more like a strategy by tallow producers to hold back supply in order to avoid sharp price declines,” the source told Fastmarkets.
Participants in the biodiesel sector said tallow prices were still paired with exports, which made it less competitive in the domestic market compared with soyoil.
The market expects increased demand for domestic feedstocks such as tallow and soyoil after the increase in the mandatory biodiesel blend in diesel from 14% to 15% (B15), which takes effect on August 1.
A source said the B15 blending mandate should not be expected to be felt in prices before October, as biodiesel producers currently have inventories.
“Since it takes about 40 days for the demand increase to take effect, that impact would likely not be seen in August and September,” they said.
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