Wests sweet tooth gives Sudan Gum Arabic export success

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On a plantation outside En Nahud in western Sudan, Mohammed Adam harvests Gum Arabic from his acacia trees.

Gum Arabic is a natural and edible gum taken from these trees. It takes four years for each tree to fully grow; a small cut is then made on the bark, which causes a glue-like resin to seep out. This resin, or Gum Arabic, is collected once a year.

Adam belongs to one of 3,000 Gum Arabic associations in Sudan. He makes about 6,500 US dollars a year from his crop, but said he wishes he could benefit as much as the exporters.

“We know that when Gum Arabic is exported abroad, the traders make a lot of profit, we do not benefit like they do. We hope we can make more profit in the future,” Adam said.

Analysts said there are so many middlemen who buy the produce at a cheap price and sell at higher prices abroad, leaving farmers struggling to get their share of the profits.

The United Nations (U.N.) World Food Program and World Bank provide aid to small farmers in Sudan but the industry also faces another problem -- a shortage of workers.

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 tons in the current season.

Business is booming in the area thanks to rising global demand for Gum Arabic, used as an emulsifier to prevent sugar from crystallizing in fizzy drinks, as a thickener in confectionery and as a binder for drugs, cosmetics and postage stamps.

Hundreds of farmers and traders meet every day to buy and sell the gum at the nearby state capital of El-Obeid.

Sudan’s association of Gum Arabic producers estimated 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 tons.

At the same time, traders complained the price of Gum Arabic has tripled in the last two years.

The jump in prices is partly driven by Sudan’s soaring annual inflation, which hit 46.5 percent in November, but producers also noticed more demand from abroad compared to previous years.

Fatma Ramli is the national coordinator of the Gum Arabic producers association.

“We have markets in East Asia, Japan, China and Gulf states. All people import Gum Arabic besides the United States and Europe. Because of this the price has increased in the last three years and there is incentive to the producer who works hard to produce as much quantity as he can,” she said.

It is a rare export success story for Sudan, which has been plagued by ethnic conflicts, poverty and poor economic infrastructure.

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.

There is little reliable production data for Gum Arabic though as some gets smuggled into South Sudan and Chad. Government officials put Sudan’s global market share at 80 percent, but some analysts think this figure is much too high and that market share could have fallen to between 20 to 40 percent.

Sudanese farmers, who often produce Gum Arabic in small groups with little efficiency, risk losing out to growing competition from other countries like Chad and Nigeria.

Fighting between rebels and the army in three farming regions of Sudan, Darfur, Blue Nile and South Kordofan, has also hit production.

But Sudan’s Gum Arabic is still first choice among many consumers because of its high quality.

“The total amount of Gum Arabic sold in En Nahud market during 2012 amounted to 9,000 tons. Compared to last year, this amount it is too small because we exported in 2011 13,000 tons and this represents a great percentage of Sudan’s export of Gum Arabic,” said Hisham Umbaddah, the director of crops market in En Nahud.

Sudan earned 81.8 million U.S. dollars from exporting 45,633 tons of Gum Arabic in 2011, up from 23.8 million on 18,202 tons in 2010, according to the latest central bank data.

Subsequent price and volume increases suggest it might earn over 200 million US dollars 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 US dollars in oil revenues.

But the Gum Arabic boom does suggest developing other export industries is possible for Sudan.

Many newcomers are now working to set up processing factories since the government ended a state monopoly on the business in 2009. Most plan to refine and clean gum Arabic so it can fetch higher prices abroad.