Chinese exports of used cooking oil (UCO) reached a record high in 2024, according to a report by the US Department of Agriculture (USDA).
The USA was the leading export market for Chinese UCO shipments last year, importing 1.27M tonnes, up approximately 52% from 2023 and accounting for around 43% of China’s total UCO exports, the USDA’s Foreign Agricultural Service (FAS) 7 March report said.
However, following China’s removal of the 13% export tax rebate for UCO on 1 December, UCO exports dropped by 60% month-on-month, according to the FAS’s Global Agricultural Information Network (GAIN) “China: UCO Trade Update”.
According to market reports, China’s UCO market slowed further after Chinese New Year in early February due to declining order numbers and prices, traffic congestion and logistics delays, in addition to the tax rebate cancellation.
Market sentiment remained low, with many traders holding onto their stocks or selling at lower prices due to cash flow issues and a lack of confidence in the market, the USDA said.
Sellers were reluctant to sell at lower prices, and many traders were minimising purchases to avoid losses from price fluctuations.
According to industry contacts, international demand for UCO has reached unprecedented levels, with a significant increase in imports by Europe, North America and Singapore in Asia, which contrasted sharply with the sluggish domestic market.
Industry analysts said the domestic market slump was temporary, and with growing international demand and tightening domestic supply, the UCO market was expected to rebound.
Driven by urgent shipping needs, supply constraints and rising global demand for biofuels, the UCO market is expected to enter a new growth wave, according to some sources.
However, others reported that future market trends would depend on supply-demand dynamics, policy adjustments and international market developments.
