German Tallow Oil Prices Fall in September 2023 Amid Declining Demand
German Tallow Oil Prices Fall in September 2023 Amid Declining Demand

German Tallow Oil Prices Fall in September 2023 Amid Declining Demand

  • 06-Oct-2023 5:11 PM
  • Journalist: Yage Kwon

The prices of Tallow Oil embraced a downward trajectory in Germany throughout September 2023. Tallow Oil, known for its extensive application in the food and healthcare sectors, has experienced a notable decrease in demand and subsequent price decline. This diminishing trend can be attributed, in part, to the growing preference among consumers for plant-based alternatives like palm oil, driven by ethical considerations and a desire for improved health. Consequently, the reduced demand for animal-derived products has exerted downward pressure on Tallow Oil prices, thereby keeping market sentiments on the lower side. Tallow Oil has played a crucial role in the advancement of biofuel production. However, the recent surge in more affordable biofuel exports from China has resulted in a substantial decline in biodiesel prices within the European Union. This has led to a decreased demand for Tallow Oil in the German market, ultimately causing a noticeable decrease in its prices.

The latest data reveals that manufacturing output in the Eurozone is still experiencing a severe and widespread slowdown as demand continues to decline rapidly. The manufacturing sector in Germany continued to contract for a fifteenth consecutive month in September 2023, with the PMI being revised marginally lower to 39.6 from a prior reading of 39.8. The decline is fueled by decreased demand from local and international markets. New manufacturing orders continued to fall sharply, albeit at the slowest rate in three months. The decline in demand within the sector can be attributed to various factors, such as customer apprehension, extensive stock reduction initiatives, and a downturn in factory productivity, which have led to a decrease in the prices of Tallow Oil.

Germany's inflation rate considerably decreased in September from over 6% to 4.5%, as per the preliminary data issued by the Federal Statistical Office. The decrease can be attributed to a base effect resulting from the conclusion of the government's efforts in combating inflation. The ECB (European Central Bank) has implemented a series of interest rate hikes to curb inflation. The ECB elevated interest rates to 4 percent for the tenth consecutive meeting in September, which reduced market demand and kept Tallow Oil prices on the lower side.

According to the analysis conducted by ChemAnalyst, it is projected that the prices of Tallow Oil will experience a gradual upsurge in the upcoming months. This can be attributed to the growing demand from end sectors and the limited supply available in the market. Additionally, central banks have underlined that the key ECB interest rates have reached levels that, if sustained for an extended period, will aid in the prompt restoration of inflation to the objective. This might contribute to a recovery in consumer confidence and a rise in Tallow Oil prices. Furthermore, trade relations with China are expected to improve, allowing the Tallow Oil market to flourish.

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