New Year brings with it splendid new opportunitiesJanuary 4, 2016 10:46
West’s sweet tooth makes Sudan’s gum Arabic a rare export success story
Sudan earned $81.8 million from exporting 45,633 tonnes of gum arabic in 2011 with subsequent price and volume increases suggesting it might earn over $200 million this year.
January 6, 2013 8:10 by Reuters
Counting piles of banknotes in front of his tiny warehouse, Sudanese trader Maaz Adam is arranging yet another purchase of a red g u m which may find its way into a bottle of soda pop drunk a world away from this dusty town.
“I bought today 25 sacks for around 10,000 to 11,000 pounds (around $1,500 at the black market rate),” he says, putting the banknotes in the suitcase of another trader who is preparing to seek more supplies of gum arabic from village farmers.
Business is booming in the western Sudanese town of En Nahud thanks to rising global demand for gum arabic, a natural and edible gum taken from acacia trees growing in the area.
Adam paid about 440 pounds per large sack, three times as much as he paid two years ago. Used as an emulsifier to prevent sugar from crystallising in fizzy drinks, as a thickener in confectionery and as a binder for drugs, cosmetics and postage stamps, gum arabic is in high demand in many countries.
It is a rare export success story for Sudan, which has been plagued by ethnic conflicts, poverty and poor economic infrastructure. The gum arabic trade hints at the growth which the country may achieve if it can find ways to mobilise more of its vast areas of arable lands and agricultural resources.
Because gum arabic is so important to the soft drinks industry and other products, the United States has exempted it from a broad trade embargo which Washington originally imposed in 1997 over Sudan’s human rights record.
This has allowed Sudan to remain a world power in gum arabic. It hopes rising demand, especially from fast-growing Asian countries, will help to soften an economic crisis triggered by the loss of three-quarters of its oil production when South Sudan seceded in 2011.
Sudan’s association of gum arabic producers estimates farmers will produce up to 80,000 tonnes of gum arabic in the 2012/2013 season, after enjoying plenty of rain in the often-dry savannah. Last year, they produced about 40,000 tonnes.
The jump in prices is partly driven by Sudan’s soaring annual inflation, which hit 46.5 percent in November, but producers also notice more demand from abroad compared to previous years.
“We have new markets,” said Fatma Ramli, national coordinator of the association. “We now have markets in the Far East, Japan, the Gulf, China as well as America and Europe.”
Gum arabic is produced in Sudan’s savannah belt, which stretches from the western border with Chad to Ethiopia in the east. En Nahud lies in the main farming state of North Kordofan, which alone is expected to produce 40,000 tonnes in the current season that will end in the spring, Ramli said.
“It doesn’t bring in as much as cotton and oilseeds, but its importance comes from the fact that it’s all produced in the poverty belt,” said Abda el-Mahdi, an economist in Khartoum.
Sudan earned $81.8 million from exporting 45,633 tonnes of gum arabic in 2011, up from $23.8 million on 18,202 tonnes in 2010, according to the latest central bank data. Subsequent price and volume increases suggest it might earn over $200 million this year.
That would still be only a small fraction of the billions of dollars which Sudan lost because of the secession of the south; in 2010, the last year before secession, Sudan earned at least $5 billion in oil revenues. But the gum arabic boom does suggest developing other export industries is possible for Sudan.