Press release
Oleic Tall Oil Fatty Acid Market is anticipated to expand at a CAGR of 4.2%
Key Highlights of Global Tall Oil Fatty Acid MarketThe global tall oil fatty acid market was valued at US$ 882.15 Mn in 2018 and is anticipated to expand at a CAGR of 4.2% during the forecast period
TOFA is obtained from crude tall oil, a by-product of the Kraft paper pulping process. Pine wood logs are the primary raw materials required for paper production; therefore, forestry products such as pine trees and other coniferous trees comprise the raw materials for crude tall oil and subsequently TOFA.
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TOFA is used in various end-user industries such as soaps & detergents, lubricants, fuel additives, paints & coatings, and plastics. It is used where long chain fatty acids are required. TOFA mainly comprises oleic acid and linoleic acid in almost equal proportion with trace amounts of linolenic, palmitic, and stearic acids. Oleic and linoleic acids are long chain fatty acids with 18 carbon chains. Dimer acids, alkyd resins, and fatty acid esters are the primary intermediate chemicals of TOFA. These are further processed for applications in end-user industries.
Key Drivers of Global Tall Oil Fatty Acid Market
One of the major factors working for the global tall oil fatty acids market is the risen use of these fatty acids over various applications in the raw petroleum production area. Attributable to the rising development of raw petroleum over in various regions across the globe, the increase of tall oil fatty acids has likewise picked up the pace considerably.
The pattern is foreseen to be sustained throughout the following couple of years also, with the enduring rise in R&D activities in Europe, North America, and the Middle East giving consistent development prospects. The surging demand for oleic acid, is considered as one of the central point that is foreseen to energize the development of the global tall oil fatty acid market in the coming years.
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The market is likewise expected to profit by the rising demand of tall oil fatty acids from the soaps and detergent sector. Nevertheless, the market is contrarily influenced because of the low penetration rate of tall oil fatty acid in various developing nations, particularly crosswise over regions, for example, Asia Pacific.
While this could reduce the development prospects of the market to a degree, the expanded utilization of tall oil fatty acids for the making of biodiesel could exhibit solid development scope for the market
Shifting market preference for tall oil fatty acid from tallow oil fatty acid in North America and Europe
Different types of oils and fats are used for the production of natural fatty acids. These include palm oil, palm kernel oil, coconut oil, tall oil, animal tallow, and rapeseed oil. Until three decades ago, primary raw materials used for manufacturing oleochemicals were coconut and tallow oil; the latter provided C18 and C16 fatty acids, while the former provided C14 and C12 fatty acids.
Initially, developed economies such as Japan and the U.S. as well as the European region relied significantly on tallow as it served as a cost-effective source of feedstock in the oleochemicals industry. However, after 1990, several health issues began to arise due to the consumption of tallow.
This eventually shifted the industry preference towards vegetable oils. Until 2012, prices of TOFA were comparatively lower than tallow derived oleic acids. As a result, many end product manufacturers shifted preference to tall oil fatty acids for applications such as soap & detergents, oilfield chemicals, and lubricants. Soaps & detergents made from TOFA are also considered to be more environmentally sustainable.
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Low Market Share of TOFA in the Highly Populated Region to Hamper Global Tall Oil Fatty Acid Market
The lack of quality raw materials hampers the local market from producing the desired grade of TOFA. However, demand for TOFA in the region is estimated to increase during the forecast period.
The low market share of TOFA in the highly populated region, which has high demand for most end-use products of TOFA, provides Asia Pacific with an opportunity to expand in the TOFA market.
North America & Europe Dominates Global Tall Oil Fatty Acid Market
Demand for TOFA is the highest in North America. Demand for oleic acid, which is found in abundance in TOFA, is also high in the region. TOFA is rich in oleic acid concentration along with other natural fatty acids such as tallow oil fatty acid, lard oil fatty acid, safflower oil fatty acid, olive oil fatty acid, and peanut oil fatty acid. Most vegetable oil fatty acids are significantly higher priced and scarcely used in industrial applications.
Tallow oil fatty acid and tall oil fatty acid hold the majority of the market. Tallow oil is a by-product of the meat industry. It is similar to tall oil, which is a by-product of the paper and pulp industry. Steady decline in the popularity of tall oil fatty acid in North America has opened up opportunities for the TOFA market in the region.
Oleic acid is used in a variety of applications such as soaps & detergents, paints & coatings, adhesives, emulsifiers, and oilfield chemicals. Most of these applications have expanded moderately; however, demand for oleic acid in oilfield applications is of special importance.
North America accounts for the largest demand for oilfield chemicals in the world due to the presence of shale assets, oil sands, and deep-water petroleum resources in the Gulf of Mexico.
Furthermore, the oilfield chemicals industry in North America has witnessed significant growth, expanding at close to double digit rate. TOFA based oleic acid is primarily used as lubricant, emulsifier, and corrosion inhibitor in the oil drilling industry.
Growth in requirement of TOFA based oleic acid is in proportion with the increase in drilling activities in North America, particularly in the US.
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Consolidated Nature of Global Tall Oil Fatty Acid Market
The competitive scenario of the global tall oil fatty acid market is marked by highly consolidated situations and intense competitions among the key players. These players are working efficiently and in a well-organized manner in terms of overall share of the global tall oil fatty acid market.
In order to sustain their positions in the market, players are investing heavily in the R&D activities of more efficient and advanced varieties of the products. They are also making efforts to get into mergers and acquisitions and strengthen their in-house distribution chain of crude materials in order to expand their product portfolios.
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