France and Belgium Opting for Animal Fat due to High Vegetable Oil Prices

Pork Fat
Duck Fat
Published May 23, 2022
Due to the high price of vegetable oils, some countries have increased their use and imports of animal fats. In Q1 of 2022, French pig and poultry fat imports increased by 44% YoY. In Q4 of 2021, Belgium's pig and poultry fat imports more than tripled from the previous year. Demand for animal fats was exceptionally strong in recent months, as the increased use of vegetable oils during Ramadan indirectly increased the use of animal fats. Animal fats are already commonly used in French and Belgian cuisine, and consumers are more comfortable using them as a substitute for vegetable oils than in countries where they are unknown.

Increased Pig and Poultry Fat Imports

Some European countries are increasing the use of animal fats as an alternative to vegetable oils, due to the high prices of the latter. This trend is most apparent in France and Belgium as both countries have significantly increased their imports of pig and poultry fat (HS Code 1501) throughout most of 2021. The trend started off slowly in the first quarter of 2021 and moved upward throughout most of last year. Imports were especially strong in the months leading up to Ramadan when cooking oil consumption typically increases. France imported 12,760 mt of pig and poultry fat in the first quarter of 2022, compared to only 8,840 mt in the first quarter of 2021. Belgium's imports soared to 19,996 mt in the last quarter of 2021, from only 4,933 mt in the last quarter of 2020. Belgium imported a considerable 6,741 mt in January, which is the most recently reported data.

High Prices and Shortages of Vegetable Oils

In both France and Belgium, palm oil has the largest market share of the major oil imports. Palm oil is normally one of the most affordable cooking oils and in France, pig and poultry fat normally trade at a premium to palm oil, based on the unit value of imports. However, at the end of 2020 and the start of 2021, palm oil prices spiked above that of pig and poultry fat, spurring the increase in imports. In Belgium, based on the unit values of imports, pig and poultry fat and palm oil are closely correlated, but early in 2021, palm oil prices were well above that of pig and poultry fats, which led to imports of pig and poultry fat taking off.

Consumers did not only take price into consideration but also availability. During the latter parts of 2021, palm oil production dropped as Covid-19 restrictions led to labor shortages. Early in 2022, palm oil exports were restricted by the world’s largest producer, Indonesia, in a multitude of policy changes aimed at calming domestic prices. Cooking oil shortages were reported in many countries, including France and Belgium. The situation worsened after Russia’s invasion of Ukraine and disruptions to the sunflower oil market.

More recently the demand for vegetable oils spiked in preparation for the celebrations surrounding the holy month of Ramadan, which indirectly increased the demand for animal fats. Vegetable oils were directed to markets with large Muslim communities, which led to price increases and also shortages in other markets. This increased the demand for animal fats which were used as a substitute for vegetable oils. Demand slowed down after Ramadan, but the long-term trend could still be upwards and will become clear when more recent import figures are released.

Animal fats, especially pig fat, are commonly used in French and Belgian cuisine, especially in the pastry industry. Typically consumers are more inclined to use a product they are familiar with than an unknown product when the regular product becomes unavailable. As in the case of France and Belgium, countries that are already familiar with animal fats will be more comfortable substituting them for vegetable oils, whereas the same trend might not be observed in countries where consumers are unfamiliar with animal fats.

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