Market evolution: Chemically modified fats and oils (CN 1518) — 2015–2025

Introduction

This report analyses the trade evolution of the European Union in chemically modified animal or vegetable fats and oils (Customs code 1518) over the period 2015–2025. Based on the provided data, the EU's trade position in this product category underwent a fundamental transformation, shifting from a slight net exporter to a major net importer. The period was characterized by a dramatic surge in import volumes and value, a significant but more modest growth in exports, and an increasing strategic dependency on key Asian suppliers. The analysis identifies the primary drivers of this shift, its internal market implications, and the resulting structural vulnerabilities for the EU.

The Import Surge and the Shift to Net Dependency

The most striking trend in the 2015–2025 period is the explosive growth of EU imports, which fundamentally altered the region's trade balance for CN 1518.

Soaring Imports Reshaped the Trade Balance

EU imports of chemically modified fats and oils increased massively in both volume and value. The import quantity rose by 296.6% (from 651,651 tonnes to 2,584,716 tonnes), while the import value surged by 624.3% (from €370 million to €2.68 billion). This growth far outpaced that of exports. Consequently, the EU's trade balance deteriorated from a deficit of €301 million in 2015 to a deficit of €2.50 billion in 2025, a 729.1% worsening. The net import reliance metric confirms this shift, moving from -9.3% (indicating a net export capacity) in 2015 to 70.4% in 2025, demonstrating the EU became heavily reliant on foreign supply.

China and Malaysia Emerged as Dominant Suppliers

The import surge was not evenly distributed. China and Malaysia became overwhelmingly dominant suppliers, as detailed in the top partners data.

China's value share grew from a negligible level to become the top source, while Malaysia's growth was even more dramatic in percentage terms. This concentration, alongside other Asian partners, points to a strategic pivot of the EU's supply chain towards Asia for this category of processed oils.

Internal EU Importers: The Netherlands as a Gateway

The import growth was channelled through specific EU Member States. The top reporters data shows the Netherlands was the primary entry point, accounting for 54.6% of total EU import value by 2025 (€1.46 billion). Spain and Belgium also saw massive increases, suggesting these ports or logistic hubs handled the bulk of the incoming flows.

Divergent Dynamics in EU Production and Export Markets

While imports exploded, the EU's domestic production and export activities followed distinct, more nuanced trajectories, indicating a complex internal market adjustment.

Robust Domestic Production Growth Masked Structural Gaps

EU production of CN 1518 goods, as measured by Prodcom data, grew very significantly in volume (266.7%) and value (337.5%) over the period. This demonstrates substantial industrial activity. However, the fact that imports grew at an even faster rate implies that rising domestic demand could not be fully met by EU producers, or that imported products served different price or application segments.

Specialisation Reveals a Concentrated EU Export Base

The EU's export profile became more concentrated. The export HHI concentration index increased by 62.4%, indicating that fewer destination countries account for the bulk of exports. This is confirmed by the volatility data, which shows exceptionally high variability (Coefficient of Variation >1) in exports to Singapore and the United States, suggesting trade with these partners is episodic or project-based rather than stable.

The United States Became a Key Growth Market for EU Exports

Despite overall volatility, the US market emerged as a crucial and growing destination for EU exports. The partners data shows a 3,266.9% increase in export value to the US, making it the top EU export market by 2025. This contrasts sharply with the decline in US exports to the EU, highlighting a significant shift in bilateral trade flows for this product category.

Market Concentration, Volatility, and Emerging Vulnerabilities

The structural changes in trade have led to increased market concentration and exposed the EU to specific vulnerabilities and price shocks.

Geographical Concentration Amplifies Supply Chain Risks

The dominance of a few suppliers creates concentration risk. The import HHI by value rose by 17.7%, but the absolute level in 2025 (1575) is high. Furthermore, analysis of volatility shows that key suppliers like China (CV: 0.79) and Malaysia (CV: 0.79) exhibit high year-to-year variability in export values to the EU, making supply planning difficult.

A Notable Export Price Shock Highlights External Sensitivity

The volatility analysis detected a significant shock event. In 2020, the average price of EU exports to Singapore spiked abnormally, with a 238.8% shift. This event, possibly linked to pandemic-era supply chain disruptions or specific technical-grade demand, demonstrates how sensitive EU export pricing in this sector can be to external market conditions.

Rising Trade Intensity Signals Growing Strategic Exposure

The trade intensity metric, which measures the ratio of trade to production, surged by 190.7% to 80.9% by 2025. This means the EU's domestic industry for CN 1518 is highly intertwined with global markets. This high openness, combined with the shift to net import reliance, increases the economy's exposure to international price fluctuations, logistics disruptions, and geopolitical tensions affecting key trade partners.

Conclusion

Between 2015 and 2025, the EU's market for chemically modified fats and oils (CN 1518) underwent a profound structural transformation. The region evolved from a position of balanced trade to one of heavy net import dependency, driven by a 624% increase in import value. This demand was predominantly met by suppliers from China and Malaysia, establishing a new, concentrated supply axis.

Concurrently, the EU's domestic production grew strongly but was outstripped by import demand, while its exports became more volatile and concentrated on a few key partners like the United States. The resulting market structure is characterized by high trade intensity, significant supply-chain concentration, and a demonstrated sensitivity to external shocks, as seen in the 2020 price spike for exports to Singapore.

The key dynamic is a strategic reorientation: the EU's industrial base for these oils appears to be increasingly integrated into global, and particularly Asian, supply chains for sourcing inputs, even as it seeks to export higher-value or specialized products to other advanced markets. The primary implication is a heightened vulnerability to trade disruptions and pricing volatility from its major suppliers, underscoring the importance of monitoring and potentially diversifying the sources of these essential industrial fats and oils.