Cargill Secures Initial Victory Against Erythritol Imports from China
Seven months after filing a petition with the U.S. Department of Commerce and the U.S. International Trade Commission, warning of the negative effects of cheap erythritol imports from China, Cargill has achieved an initial victory.
Impact on the U.S. Market
As the only U.S. manufacturer of erythritol—a zero-calorie bulk sweetener used in a variety of products, from beverages to confections—Cargill claims that it has experienced “material injury” due to Chinese-made erythritol being sold at “less than fair value.”
Cargill’s petition indicates that Chinese erythritol producers significantly expanded their capacity from 2021 to 2023 but found themselves with excess products after significant reformulations by major Chinese beverage companies. This situation led to an influx of erythritol into overseas markets, resulting in deteriorating market prices and inflated customer inventories.
Response from Authorities
The U.S. Department of Commerce acknowledged Cargill’s concerns and issued a preliminary determination on July 14, imposing substantial triple-digit duties on imports of erythritol from China. This measure has made Chinese erythritol economically unviable for many food and beverage companies in the U.S.
Challenges for Alternative Suppliers
So, why can’t companies simply purchase from Cargill at higher prices? Kash Rocheleau of Oregon-based Icon Foods indicates that while some firms can transition to Cargill, those seeking organic or Non-GMO Project-certified sweeteners face challenges. Cargill’s erythritol is produced using genetically modified (GM) substrates.
“Erythritol is quite hard to replace,” Rocheleau noted. “Alternatives like allulose and tagatose either come with high costs or labeling restrictions that deter usage.” She emphasized that without options for organic and Non-GMO products, shifting to domestic suppliers is not a simple solution.
Implications for the Erythritol Market
If the U.S. government endorses its preliminary ruling in December, Rocheleau predicts a severe shortage of organic and Non-GMO erythritol, leading to a broad contraction in the erythritol market itself. Companies that imported erythritol between March and July are already facing retroactive duties.
The Call for Requirements
Icon Foods advocates for an exemption for organic and Non-GMO erythritol from the imposed duties. “If a carve-out could be established, safeguards would be essential to prevent misuse by Chinese firms disguising products as organic or non-GMO,” Rocheleau suggested.
Broader Context: Tariffs and Market Diversification
When discussing the impact of tariffs, Rocheleau describes a mixed bag. Other sweeteners like steviol glycosides and allulose face the basic 10% tariff, while erythritol is subject to much higher tariffs compounded by anti-dumping duties. According to her, diversification in sourcing is key to navigating these challenges: “We have two to three supply chain partners to ensure stability as the tariff situation evolves.”
Cargill did not respond to requests for comment on this ongoing issue, which continues to unfold and impact the broader food and beverage landscape in the U.S.
