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A record Brazilian corn crop could support the polyol outputApril 17, 2023
China corn production edges higher for 2022/23February 01, 2023
Russia pulls back from grains deal, corn prices likely to bear the bruntOctober 31, 2022
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Sorbitol market frequently asked questions
The global sorbitol market is receiving major impetus from the double-digit rise in US corn (feedstock) production and the gradual increase in chewing gum and vitamin C demand.
Sorbitol, a 6-carbon polyol, is a natural ingredient in various fruits and some vegetables. As per Beroe’s market report, the worldwide polyol and sorbitol production clocked 3.9 MMT and 2.36 MMT, respectively, in 2019.
Market players continue to reap revenue benefits from North America and Europe over the forecast period. While the former produces 0.6 MMT per year (on average), the latter produces 0.46 MMT.
The sorbitol suppliers lack adequate power in the value chain as prices depend on the global demand-supply, along with current domestic price trends. Moreover, the demand for polyol affects the negotiation process, further moderating the supplier bargaining potential.
Beroe’s study has highlighted Cargill and Roquette, among others, as the key sorbitol producers who procure corn directly from the grain elevators.
The global sorbitol market is highly consolidated, with established players holding over 60% of the overall revenue pool. To strengthen their market position, market participants are investing in mergers and acquisitions (M&A). In addition, they are forming manufacturing units in Asia, especially China, to broaden their customer base. Nevertheless, regional and independent sorbitol suppliers are giving tough competition to their global counterparts.
Market players confront the risk of substitutes, such as xylitol, stevia, and aspartame. However, sorbitol holds the upper hand owing to its oral health benefits; as such, substituting the polyol with other alternatives will be a cost-intensive affair.
Sorbitol market report transcript
Sorbitol Global Market Outlook:
Global Polyol Supply (2022-23F) 4.69 MMT
Global Sorbitol Supply (2022-23F) 2.66 MMT
Key Market Drivers
A drop of 5 percent in the global corn production, owing to a downside in Argentina and EU corn crop
Chewing gum demand (projected CAGR until 2025: 3.42 percent)
The global supply of polyols is expected to surge by 5.1 percent over a five-year period ending 2023
A good corn crop (feedstock) in the US and China and the demand from the end-use segments, such as Vitamin C, toothpaste, and chewing gum industries, amidst the post-pandemic recovery, is expected to provide a fillip to the market. However, the Argentina and EU corn crop is projected to be lower in MY 2022-23
In case of individual polyols, the global sorbitol production is set to rise at a CAGR of 3.2 percent by 2021-2025 while xylitol and mannitol markets could rise at a CAGR of 5.1 percent and 4.1 percent, respectively, during the same period
Sorbitol is the most used polyol, due to lower production cost, but the health benefits of xylitol and mannitol could ensure that the latter two offer competition to sorbitol in the coming years
Global Sorbitol: Supply Analysis
An estimated 2.55 MMT of sorbitol was produced globally in 2021-22, with this figure estimated to rise to 2.659 MMT in 2022-23, with a reported global operating capacity of 83.3 percent.
China is the main growth driver of the global sorbitol production, resulting in a net output of is expected to surpass 2.659 MMT by 2023.
Porter's Analysis on Sorbitol
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 entry 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 substitutes is thus moderate
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
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