China's erythritol exports face setback as Cargill wins initial anti-dumping case, though decision may produce unwanted repercussions
The U.S. market for non-GMO and organic erythritol is facing a potential shortage, as the recent imposition of hefty anti-dumping duties on Chinese imports has limited the available options for food and beverage companies seeking certified versions of this popular sweetener.
The sole U.S. erythritol producer, Cargill, does not currently offer certified organic or Non-GMO erythritol, leaving domestic supply unsuitable for companies with these certification needs. Meanwhile, European producer Jungbunzlauer, which uses non-GMO corn sugars and produces organic-certified erythritol, has limited excess production capacity due to their focus on the EU market following their successful anti-dumping case there.
As a result, if U.S. authorities uphold their preliminary rulings on duties, companies requiring organic or Non-GMO erythritol will effectively have no available imports from China or surplus non-Chinese sources, causing a likely significant supply shortage in the U.S. market.
Many major consumer packaged goods companies reliant on these certifications might need to engage with policymakers or pursue new supplier development to mitigate this emerging shortage caused by trade restrictions on Chinese erythritol imports.
Erythritol, a zero-calorie bulk sweetener widely used in beverages and confectionery, is subject to a higher tariff combined with anti-dumping duties compared to steviol glycosides and allulose from China. This situation is a direct consequence of the intersection of trade duties and the limited global production capacity for certified organic/Non-GMO erythritol.
Additional context:
- Jungbunzlauer’s ERYLITE® brand is known for high-quality natural erythritol produced from non-GMO corn in France and available in grades suitable for clean-label and organic products.
- Some food and beverage companies cannot switch to Cargill for their erythritol needs due to the use of GM substrates in Cargill's production process.
- Chinese erythritol companies significantly expanded in 2021-2023 but found themselves with spare capacity after major Chinese beverage companies reformulated their products.
This news comes as firms importing erythritol were told they would be subject to retroactive duties if Cargill's petition is successful. Other potential tariffs may also affect related ingredients, such as tapioca fiber and inulin, unless exemptions are secured. The European Commission imposed a provisional antidumping duty on certain erythritol from China on July 19, 2024, adding another layer of complexity to the global erythritol market.
In light of these developments, the big CPG companies are urged to use their voice to change the Department of Commerce's opinion on the matter, potentially paving the way for a more sustainable and diverse erythritol supply chain in the U.S. market.
- The ongoing shortage in the U.S. market for education-and-self-development materials regarding general-news topics, such as the potential impact of trade duties on the availability of erythritol, highlights the need for these companies to stay informed and adapt their supply chains accordingly.
- With the European focus on the EU market for sports nutrition products, such as those utilizing erythritol as a low-calorie sweetener, it may be beneficial for American sports brands to explore partnerships with European producers like Jungbunzlauer to secure organic and Non-GMO erythritol, thus ensuring continued product development and innovation.
