Offtake and Tolling are both ways that traders secure product to trade. Markets are becoming increasingly competitive - if you have to win on price alone, your margin on a given trade can be eaten up very quickly. Traders are however nothing short of creative, and as firms have got larger, they have looked to deploy their financial resources in different ways.
Let's start with offtake, looking at metals and mining as our example. Mines are difficult and expensive to build from scratch. They are often fraught with delays and cost overrun for all sorts of reasons - technical, regulatory or even weather. This means they are often on the lookout for extra cash to finish the project. This is where the trader steps in. A trading firm can offer the last leg of financing for a mine that's almost finished, but not without getting their pound of flesh. In return (instead or alongside an interest rate), the trader might ask for a guaranteed option to buy a certain share of the mine's annual production, for pre-agreed (usually favorable) terms. This allows the trader to have some certainty of what her book will look like in the medium-term, without having to compete against her peers to bid for the mine's material every time, and be sure to have material to sell. Ideally the trader will also lock in a below-market premium for the material so they also lock in a margin.
Tolling is slightly different - it involves a processing facility. Back to our mining example - our mining company might need capital to build a smelter to process the ore that it produces. The trader might now ask to have an agreement to process any raw material she sources, outside of the mine, again at favorable terms. This way the trader has a stable outlet for ore/concentrate she can source elsewhere, and a guaranteed supply of refined metal. Again, a smart trader would make sure the process locks in a margin to guarantee a profit for the lifetime of the deal. Such agreements are common across the spectrum of commodities - metals, oil (refineries) and even cotton.
Both offtake and tolling agreements can solve major problems in traders' books. In certain market conditions it is either impossible to source material, or impossible to sell it. These contracts also provide much sought-after optionality around which traders can position.