In recent years, dumped and subsidized pea protein imports from China have made it impossible for domestic producers, including PURIS, to obtain a fair rate of return.
So, let’s dive into what that means for the pea protein market — and how we can move forward to protect the integrity of the foods we create for our consumers.
Let’s start at the beginning
First, it’s important to take this issue back to the basics.
What are anti-dumping laws?
Anti-dumping laws in the United States are designed to protect domestic industries from unfair competition from foreign imports that are sold at less than fair value ("dumped"). Dumping occurs when a foreign producer sells a product in the United States at a price that is below that producer's sales price in the country of origin ("home market"), or at a price that is lower than the cost of production.
What are countervailable laws?
Countervailing laws in the United States are designed to protect domestic industries from unfair competition from foreign imports that are subsidized by their governments. Subsidies can come in many forms, such as direct financial payments, tax breaks, or low-interest loans. When a foreign government subsidizes its exports, it can lower the price of the exports, making them more competitive with domestic products.
How did we get here?
Chinese noodle producers repurpose discarded water from pea starch production, extracting valuable pea protein identical to that made domestically. They export this protein to the United States at dumped and subsidized prices.
What is PURIS doing to address unfair trade practices?
PURIS filed Antidumping and Countervailing (AD/CVD) petitions requesting that the United States government investigate imports from China to protect its domestic supply chain and ensure a fair return on its investments. By taking this stand, we aim to address unfair trade practices and safeguard the integrity of the pea protein market.
In August, the U.S. International Trade Commission unanimously voted to continue the investigations based on a reasonable indication that dumped and subsidized imports of high protein content (HPC) pea protein from China were causing material injury to the United States pea protein industry. Commerce is now conducting its investigations and is expected to make its preliminary determination in the countervailing duty (anti-subsidy) case in December, and it will likely make its preliminary determination in the antidumping case in February.
The impact of an AD/CVD suspension agreement
Our mission to establish a sustainable and equitable food system depends on a fair-trade environment. Investigating and rectifying these unfair trade practices will safeguard the efforts of organizations like ours, preserving market integrity for future generations.
Should our petition pass, exporters and producers will be required to stop dumping to eliminate the existing unfair pricing or subsidies. This suspension is only possible via an investigation phase in an AD or CVD proceeding in which PURIS is presently engaged.
Your AD/CVD questions, answered
High protein content (≥65% dry basis) pea protein, which is a protein derived from yellow or green peas. This may be identified as pea protein concentrate, pea protein isolate, hydrolyzed pea protein, pea peptides, and fermented pea protein.
Investments in North American pea protein processing surpass an estimated ~$1B. In order to earn a fair rate of return on these investments, the U.S. market must have level playing without the significant distortions and injury caused by unfairly dumped and subsidized imports from China.
These cases will help to restore a fair market and provide a platform for the wider U.S. pea protein industry to thrive and continue to build on its investments in U.S. supply chains, workers, and communities.
PURIS will continue to price with growers, food manufacturers, and consumers in mind. We are in the market of supporting domestic farmers and are committed to making these businesses profitable. This benefits not only farmers but also the nation's food security.
Our protein prices follow the pea market pricing, and we will continue to price for all parties to win in the marketplace.
With the successful expansion of our Dawson facility, we have significantly increased our production capacity to meet the growing domestic demand for pea protein.
The facility's advanced technology and efficient processes have allowed us to scale high-quality pea protein production efficiently. With these investments in our facility, we have strengthened our ability to serve our customers promptly, ensuring a reliable supply of pea protein for their diverse applications.
Yes, China has existing tariffs on the imports of pea starch and pea protein from the United States.
Pea Starch: 50% Tariff; 13% VAT
Pea Protein: 90% Tariff; 13% VAT
Implementing tariffs on imported pea protein from China into the United States will level the playing field and increase domestic consumption of peas.
Where do we go from here?
PURIS's commitment to fair trade extends beyond our organization; it encompasses the broader industry and the economic stability of our nation.
A market operating on a level playing field benefits everyone involved — our network of hundreds of farmers, manufacturers, suppliers, investors, and consumers. By addressing this situation, we strive to uphold the integrity of our domestic supply chain, support local businesses, and foster an environment where healthy competition thrives.
Unsure how this petition will impact your business?
We understand that this petition is likely raising concerns about the future of certain pea protein supply chains for food manufacturers. We’re here to answer your questions and help you find a suitable protein that will work for your business while elevating your end product.