Mannitol

Mannitol Global Market Outlook:

Global Polyol Supply (2022-23 F) 4.69 MMT

Global Mannitol Supply (2022-23 F) 0.07 MMT

Key Market Drivers:

8.91 percent decline in the US corn production in the 2022-2023 crop season

Chewing gum demand (projected CAGR until 2025: 3.42 percent)

• We maintain that the global production will rise by an estimated 3.5 percent CAGR between 2018 and 2024, owing to a fair demand from end-use industries

• The feedstock corn supply is expected to shrink in MY 2022/23, as the drought in Argentina and a lower crop from EU and Black sea region is likely to impact the production

• China has stepped up the corn purchases from Brazil in an attempt to offset the imports from the US

• The demand from the downstream industries is expected to remain stable, as the recessionary trend prevails across major economies

Global Mannitol: Trade Dynamics

• Mannitol exports have estimated to have risen by a CAGR of 6.96 percent from 2018 to 2022. France is also a major exporter of polyols, including mannitol.

• The global exports are estimated to dip in 2022, due to a shortage in feedstock availability

• China incurs tariffs of 4.6 percent and 9.6 percent for exports to the US and Turkey, respectively. Exports to Japan are tariff free

• Exporting regions incur a tariff of 20 percent for exports to India, the latter being a net importer, despite being an exporter as well

• Import shares have remained stable over the last five years, with minor fluctuations. Indian imports have surpassed that of the US. Nigeria has been a major importer in the recent years

Porter's Analysis on Mannitol

Supplier Power

• The feedstock is corn. The corn traders and farmers are the major suppliers

• Polyol manufacturers, like Roquette, Cargill, and others, buy corn directly from grain elevators

• The prices are fixed according to futures like, CBOT or current domestic prices

• The suppliers do not have major power, since prices are fixed by the global supply–demand trend

• Supplier power is moderate, as demand for polyols also impacts negotiation

Barriers to New Entrants

• Consolidation of the global suppliers is a major barrier to entry. Acquisitions and mergers are common in the industry

• In addition, the global suppliers are actively setting up bases in regions, like China

• Despite this, independent companies offer competition to the global suppliers

• Barriers to entries are thus moderate

Intensity of Rivalry

• The polyol supplier industry is consolidated by the global suppliers, who account for 64 percent of the market share

• There is, however, competition from regional suppliers in China and other parts of Asia

• The global suppliers consolidate shares by acquisitions or mergers

• The presence of competition makes intensity of rivalry high

Threat of Substitutes

• There is a threat of substitution for polyols, with substitutes, such as stevia, aspartame, and others. Sorbitol itself is a substitute for sugar

• Sorbitol can be substituted by Xylitol, still it is not cost effective to compete with sorbitol, but there exists growth potential, due to health benefits

• The threat of substitute is thus moderate

Buyer Power

• The supplier market is fairly consolidated, and there are several competing end-use segments

• Demand for polyols from several end-use sectors could offer bargaining leverage to the supplier

• The presence of several regional suppliers could provide negotiation levers to the buyer

• Buyer power is thus moderate