Used Cooking Oil Pricing On The Way Back Up

Whilst I think it will be many years until we again see Used Cooking Oil at the ludicrously high prices caused by Covid and the war in the Ukraine.

And it certainly looks like the four-month decline in current pricing will soon be over.

Most analysts agree that the Jan 23 to May 23 continuous drop in Used Cooking Oil pricing was an over-correction from those previous heady heights.

Used Cooking Oil pricing is driven by the price of Biodiesel manufacture in the UK. The reason for that is simple, 99% of Used Cooking Oil collected in the UK goes directly to those UK Biodiesel refineries.

Used Cooking Oil pricing is not linked to UK Biodiesel, but it always follows its trend. UCO price movements often lag behind UK Biodiesel movements and that movement is often exaggerated causing peaks and troughs that are more severe than the UK Biodiesel trend.

This is often referred to as the ‘Bullwhip Effect’, for the chic-geeks amongst you, this is actually known as the Forester Effect.

The super-high Used Cooking Oil price in Jan 23 was an over reaction to the increase in the price of UK Biodiesel, similarly the low Used Cooking Oil pricing in Apr 23 was a similar overcorrection.

Those of us in the Used Cooking Oil sector who are able to look at things long-term and not just what’s happening today will be keeping a close eye on this current rise in the UK Biodiesel price and an even closer eye on the Used Cooking Oil price which will inevitably ‘whiplash’ upwards in the coming weeks.

Have a safe day.

Rob