North America’s pea protein business is in “grave peril” due to cheap product flooding into the United States from China, according to a U.S. manufacturer of the product.
The U.S. International Trade Commission (USITC) appears to agree.
It has made a preliminary determination that China is dumping pea protein into the market “at less than fair value and subsidized by the Government of China.”
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The petition was filed by PURIS Proteins LLC, which claims it has been forced to lay off workers at its plant in Turtle Lake, Wisconsin, as a “direct result of dumped and subsidized imports from China,” according to an AgFunder Network article.
The USITC said the complaint appears to be valid.
“The pricing data show pervasive underselling,” it said.
Chinese discounts ranged from 25.6 to 72 percent in all 52 quarterly comparisons conducted by the USITC. The average was 45.4 percent.
The U.S. Department of Commerce is also conducting antidumping and countervailing duty investigations regarding China’s alleged dumping of the product.
According to the Department of Commerce, the U.S. imported 57 million kilograms of Chinese pea protein in 2020, 74 million in 2021 and 66 million in 2022.
PURIS contends in its petition that China’s pea starch business has been steadily rising, according to the AgFunder article.
The starch is used to make vermicelli noodles and other products.
Chinese demand for pea protein is small by comparison, which is why it is being dumped on the U.S. market, PURIS alleges.
“As a result of these developments, the future of the domestic industry is in grave peril,” the company said in its petition, according to the AgFunder article.
PURIS has been forced to shut down its plant in Wisconsin, concentrating production out of its other facility in Dawson, Minnesota.
Protein Industries Canada didn’t have much to say about the U.S. investigation.
“Our sector, including our industry partners, is still in the process of gathering information related to the potential outcomes of what the investigation means for Canada,” it said in an email.
Some Canadian pea fractionation plants are also experiencing problems.
Winnipeg’s Merit Functional Foods, which was a canola and pea protein manufacturer, went into receivership March 1, just two years after opening.
Roquette, which operates the world’s largest pea protein plant in Portage la Prairie, Man., said “current trends” have slowed the pea protein market in recent months.
“As a result, Roquette in Canada is making production schedule adjustments to align with current demand,” company spokesperson James Bozikis said in an email.
He noted that the production schedule adjustments have not resulted in layoffs.
“We strongly believe that over the long-term, the market for pea protein will continue to grow, and will allow us to resume our operation in Portage at full capacity,” he said.
Bozikis said it is important that there is a level playing field that creates “fair trade for all.”
AgFunder reports that Roquette’s problems extend beyond cheap Chinese imports.
Beyond Meat signed a deal with Roquette in January 2020 to purchase a minimum of $154.1 million worth of pea protein by December 2022.
But due to slumping sales in the alternative meat segment, that agreement has since been revised.
Beyond Meat is now committed to buying $2.7 million for the remainder of 2023, $10.9 million in 2024 and $17.1 million in 2025, according to AgFunder.
Final determinations from the two U.S. government agencies are scheduled for between Dec. 19, 2023, and April 18, 2024.
Contact sean.pratt@producer.com
