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Gum Arabic: Why Sudan's War Affects Soft Drinks, Sweets and Wine

2023-06-06T05:16:51.468Z

Highlights: Sudan produces around 70% of world exports of gum arabic, an exotic natural sap. The sap is used in the production of many consumer goods, especially in the food industry. The war is generating growing concern about the effects it may have on its supply to the world. In the short term, the total paralysis of its export as a result of the war is not expected to impact the activity of companies that use this ingredient, according to the Association for the International Promotion of Tires (AIPG)


The African country produces around 70% of world exports of this essential sap for giants such as Coca-Cola, PepsiCo or M & M


Just a month and a half ago, the Sudanese merchant Mohamed Alnoor was finalizing the last procedures that remained pending to be able to dispatch to a customer a new order of several tons of gum arabic, an exotic natural sap that is used in the production of many consumer goods, especially in the food industry.

His company, Gum Arabic USA, had purchased the product from farmers in rural Kordofan, a region in southern Sudan, and transported it to the capital, Khartoum. Once there, it had been segmented and processed at its factory, taken to packaging, and stored while waiting for Alnoor to finish with the paperwork to send the cargo to Port Sudan, the country's main commercial port.

He had only two documents left when, on the morning of 15 April, a bitter power struggle erupted in Khartoum between the army and the country's main paramilitary group, which has already left hundreds dead, thousands injured, almost a million displaced and refugees, and its capital devastated, paralyzed and plunged into a total lack of security.

"[The gum arabic trade] is a logistical nightmare even when things are normal," Alnoor explains from Khartoum, where he has decided to stay to track his cargo. "Now, even if you have gum arabic somewhere and you don't want to process it or clean it, but take it and send it out, transportation is a problem because at any time, around Khartoum [the paramilitaries], they can appear out of nowhere and take whatever you have. There is a total disintegration of law and order," he laments.

Puzzles like Alnoor's would be going unnoticed were it not for the fact that gum arabic is an essential ingredient for many companies that make consumer goods, including giants such as Coca-Cola, PepsiCo, M&M and Ben & Jerry's, and because Sudan's production covers around 70% of global exports, according to 2021 data from the French Development Agency (AFD). Now, the war is generating growing concern about the effects it may have on its supply to the world.

"We need to reflect on the fact that Sudan has some valuable products that many industries are importing," says Fawaz Abbaro, CEO of Savannah Life, another Sudanese gum arabic company that has a pending shipment of about 70 tons to the United States. "Sudan has been producing it for years, but no one has cared for or appreciated it until now," he adds.

Tasteless and odorless

Gum arabic is the dry, tasteless, odorless exudate of two species of acacia, and almost all of the world's supply comes from the so-called gum belt, which stretches across the forested savannah of sub-Saharan Africa, from Mauritania and Senegal to Somalia. In small quantities it acts as a stabilizer, flavor encapsulator, thickener or emulsifier, and is used in many products of the food industry, such as sweets, soft drinks and wine, and to a lesser extent others such as cosmetics, textiles and pharmaceuticals.

Such is its importance that, when the United States imposed sanctions on Sudan in 1997 for the dictator Omar al-Bashir's regime's support for terrorist groups, gum arabic was exempted even though there have always been suspicions that Osama bin Laden, leader of Al Qaeda, had large interests in its industry. The Bush administration also waived it in 2006 when it tightened sanctions over atrocities in Darfur.

In the short term, the total paralysis of its export as a result of the war is not expected to impact the activity of companies that use this ingredient because there is stock, according to the Association for the International Promotion of Tires (AIPG). But it is feared that the prolongation of the conflict, coupled with the destruction of infrastructure and factories, will represent a problem especially for the next season, which starts in October.

Sudan has suffered severe levels of internal violence for decades, but this had been concentrated in peripheral regions. The big difference, now, is that the epicenter of the fighting has moved to the political and economic heart of the nation, Khartoum, where most of the factories for cleaning, processing and packaging gum arabic are located.

Much of the capital is currently under the control of the paramilitaries of the Rapid Support Forces, while the army tries to expel them mainly by using its air advantage, so movement is very dangerous. In addition, the banking system is inoperative, and the shocks have led to severe fuel shortages.

"There is a lot of infrastructure that has been destroyed by the conflict, so even if there was peace or calm, it would have to be rebuilt," says Mohamed Salih of Sweden-based gum arabic supplier Gum Sudan. "In addition, there are farmers who have abandoned their fields and have migrated, so the consequences could be longer than we think [right now]," he adds.

Salih explains that some companies are already considering redirecting shipments of gum arabic to countries bordering production areas such as Chad, Ethiopia and South Sudan, but notes that doing so increases transport costs above what "the world market is prepared", especially since these countries do not have access to the sea. Some of them also produce gum arabic, Salih notes, but in smaller quantities and without the same infrastructure to process it that existed in Khartoum.

The gum arabic trade has traditionally been very opaque, but two French companies, Alland & Robert and Nexira, buy more than half of all Sudanese production and share much of the world market, according to Paris-based Africa Intelligence. EL PAÍS has contacted both, but Alland & Robert referred to the AIPG statement and Nexira has not responded to the request for information.

"People should know that if we can't stop the fighting [by pressing] globally, the gum arabic [shortage] is going to really affect a large sector of the global industry," Abbaro said.


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Source: elparis

All business articles on 2023-06-06

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