In the last few weeks, US Gulf palm oil prices have moved back into a solid premium over tallow prices and reached multi-month highs of around $0.52-0.53 cents per lb on Friday August 23.
Meanwhile, Fastmarkets assessed packer-grade bleachable fancy tallow (BFT) at $0.4575 per lb Chicago basis on Friday, down from $0.4650 per lb a week earlier and from $0.5100 per lb a month earlier.
The price spread between palm oil and BFT nearly closed in early July but has widened dramatically since then.
In the first quarter, palm oil lost market share to comparatively cheaper tallow. This caused some livestock reformulations in the US feed industry, with a move from palm oil to tallow.
But by the end of May, the price spread between palm oil and tallow started to tighten back up, and by mid-June, palm oil prices briefly moved into a discount to tallow for the first time since mid-December 2023.
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