Seven months after filing a petition with the US Dept of Commerce and US International Trade Commission warning of the deleterious impact of a flood of cheap erythritol imports from China, Cargill can claim an initial victory.
The only US manufacturer of erythritol, a zero-calorie bulk sweetener widely used in beverages, candy, frostings and glazes, gum and other products, Cargill claims to have been “materially injured” by Chinese-made erythritol sold in the US at “less than fair value.”
According to Cargill’s petition, Chinese erythritol companies significantly expanded in 2021-2023, but found themselves with spare capacity after major Chinese beverage companies reformulated their products. This led key suppliers to flood overseas markets with product “at rock bottom prices” that “led to bloated customer inventories in the US and elsewhere and led to a collapse in market prices.”
“Indeed,” added Cargill in its petition, “the European Commission imposed a provisional antidumping duty on certain erythritol from China on July 19, 2024, and these petitions are Cargill’s effort to deal with the same issue.
“With provisional dumping margins of 31.9 to 235.6% now in place on exports of Chinese erythritol into the EU, Chinese producers are likely to shift the focus of their export market to the US, thus increasing the threat of continued injury by way of imports of low-priced Chinese product.
“As difficult as the current situation may be, if recent trends persist, the domestic industry is threatened with an even bleaker future.”
Hefty duties now apply to erythritol coming into the US from China
On July 14, the Dept of Commerce concurred, issuing a preliminary determination imposing hefty triple-digit duties on US importers of erythritol from China, putting it out of reach of most food and beverage companies.
So why can’t they just buy from Cargill, albeit at higher prices than those they may have become accustomed to paying for product from China?
Some of them can, says Kash Rocheleau at Oregon-based Icon Foods, which imports specialist sweeteners from China and elsewhere. But for firms that use organic or Non-GMO Project certified sweeteners, this is not an option, as Cargill uses GM substrates (dextrose from GM corn) for the microbes used in its erythritol production process.
She told AgFunderNews: “Erythritol is quite hard to replace. You can use [low-cal bulk sweetener] allulose, but that’s also quite costly and has different properties to erythritol, plus Whole Foods doesn’t allow it and it’s not approved in the EU. Tagatose [another low-calorie sugar substitute] is an alternative, but it must be listed as added sugar on the Nutrition Facts label in the US [unlike allulose and erythritol], so that puts people off.”
She added: “We are going to continue to fight for the customers that we work with. But the big CPG companies are really going to have to use their voice if we are going to change [the Dept. of] Commerce’s opinion in this matter.
“Our argument is that Cargill does not produce organic and Non-GMO certified erythritol, so we don’t have the option of just switching [to the domestic supplier, in this case Cargill].”
Jungbunzlauer (JBL), which makes erythritol in France using non-GM corn sugars as feedstock, was successful in securing the imposition of duties on Chinese supplies heading for the EU last year, but does not now have a ton of spare capacity to supply US companies, said Rocheleau.
“We used to work with JBL quite a bit in the past, because some customers want non-Chinese material. but when they won [the anti-dumping case vs China], they really leaned into their market and now have very little capacity to overflow into the US.”
However, a Jungbunzlauer spokesperson told us: “Our dedication to serving the US market for non-GMO erythritol has not wavered. While market conditions change year to year, we have the capacity to serve a significant share of US demand and remain focused on delivering consistent, high-quality supply to our customers.”
‘The US market is going to dry up on non-GMO erythritol’
If the US government reaffirms its preliminary ruling when it makes a final decision in December, CPG companies that use organic or Non-GMO erythritol “are not going to have any options, because no one’s importing right now,” claimed Rocheleau.
And this has been the case for some time, she said, as firms that imported product between March and July were told they would be subject to duties imposed retroactively if Cargill’s petition were successful.
“Basically, the US market is going to dry up on non-GMO erythritol, it’s going to dry up on organic, and once it’s dried up, it’s just not going to be available.” Meanwhile, she predicted, the overall erythritol market may gradually contract “because people can’t afford it anymore.”
So what exactly does Icon Foods want?
According to Rocheleau: “I’d like to see the non-GMO and organic product exempt from duties. And if they were to get a carve out, we understand that there would need to be safeguards in place [to stop Chinese firms trying to get around the duties by claiming products were organic or non-GMO without proper validation].”
Tariffs: a mixed bag
Asked how the Trump administration’s tariffs are impacting the sweetener market more broadly, it’s a mixed bag, said Rocheleau.
“Steviol glycosides and allulose [from China] are subject to the baseline 10% tariff, but not to the other tariffs based on the HS code they come under, whereas erythritol is subject to a higher tariff, but that seems pretty inconsequential when you pair it with the anti-dumping duties.”
She added: “We did petition for monk fruit extract to come in under the same HS code as steviol glycosides, and this was granted.”
Inulin, much of which comes from the EU in the form of chicory root, may be subject to a 15% tariff unless exemptions are secured; while tapioca fiber, some of which Icon Foods sources from Indonesia, may be subject to a 19% tariff unless exemptions are secured.
“But we are diversified on all of our SKUs, with at least two to three supply chain partners given the uncertainty over the tariff situation and to stay secure in the supply chain,” said Rocheleau.
“We need to be able to pivot really quickly.”
Cargill did not respond to a request for comment on the anti-dumping petition.
