Growing soybean oil demand for biofuels reshapes global waste feedstock trade

Global trade flows of biofuel feedstocks continue to shift as US demand for soybean oil rises rapidly. Customs data show that US imports of used cooking oil (UCO) fell by 38% in the first half of the year compared with the same period last year. The sharpest decline came from China, where shipments dropped by 67%, while higher imports from Malaysia and Vietnam only partially offset the shortfall.

China, however, did not reduce its overall UCO exports, which increased by 7%. Instead, export destinations changed significantly: shipments to the United States fell by 61%, while exports to the Netherlands more than doubled, making it the largest buyer of Chinese UCO. As a result, additional volumes are putting greater pressure on European and Southeast Asian markets.

The United States is also diversifying its imports of inedible tallow. Overall import volumes remained broadly stable, but supplies from Brazil declined by 23%, while imports from Australia, the United Kingdom and Ireland increased significantly. At the same time, Brazil has started expanding exports of tallow to the Netherlands and Belgium, reducing its reliance on the US market.

The main driver behind these changes is the rapid expansion of US biofuel production. According to the July USDA WASDE report, soybean oil use for biofuel production is projected to increase from 11.8 billion pounds in the 2024/25 marketing year to 17.8 billion pounds in 2026/27. As a result, more than half of all soybean oil consumed in the United States will be used for biofuel production.

This trend is expected to further reduce US soybean oil exports and support higher domestic prices. Analysts note that structurally strong US demand is already reshaping global trade flows of biofuel feedstocks, prompting exporters of waste oils and animal fats to redirect supplies to alternative markets.

Tags: soybean oil, USA, biofuel, used cooking oil