The outbreak of violence in Sudan has led multinational corporations to urgently rush to secure their stocks of gum Arabic, a highly coveted commodity in the country and a crucial ingredient in producing various consumer products such as soft drinks, candies, and cosmetics.
About 70% of the world’s supply of gum Arabic, for which there are few substitutes, comes from the Sahel region’s acacia trees that run through Africa’s third-largest country, which is being torn apart by fighting between the army and a paramilitary force.
Wary of Sudan’s persistent insecurity, companies dependent on the product, such as Coca-Cola and Pepsico, have long stockpiled supplies, some keeping between three to six months worth to avoid being caught short, exporters and industry sources told Reuters.
However, prior conflicts have focused on far-flung regions such as Darfur. This time, the capital Khartoum has been brought to a standstill in the fighting that broke out on April 15, paralyzing the economy and disrupting essential communications.
“Depending on how long the conflict continues, there may well be ramifications for finished goods on the shelf – branded goods made by household names,” said Richard Finnegan, a procurement manager at Kerry Group, a supplier of gum Arabic to most prominent food and beverage firms.
Finnegan estimated that current stockpiles would run out in five to six months, a view echoed by Martijn Bergkamp, a partner at Dutch supplier FOGA Gum who estimated between three and six months.
Cloetta AB, a Swedish confectioner who makes Lakerol lozenges that use gum Arabic, has “ample” ingredient stock, a spokesperson said in an email.
Global gum Arabic is about 120,000 tonnes a year, worth $1.1 billion, according to estimates cited by Kerry Group. Most are found in the “gum belt” that stretches 500 miles from the East to the West of Africa, where the arable land meets the desert, including Ethiopia, Chad, Somalia and Eritrea.
Twelve exporters, suppliers and distributors contacted by Reuters said trade in the gum, which helps bind together food and drink ingredients, has ground to a halt.
Right now, it’s “impossible” to source additional gum Arabic from rural parts of Sudan because of the turmoil and road blockages, said Mohamad Alnoor, who runs Gum Arabic USA, which sells the product to consumers as a health supplement.
‘Can’t exist without gum Arabic’
Kerry Group and other suppliers, including Sweden’s Gum Sudan, said communicating with contacts on the ground has been challenging. Port Sudan has prioritized civilian evacuations from where the product is shipped.
“Our suppliers are struggling to secure necessities because of the conflict,” Jinesh Doshi, managing director of Vijay Bros, an importer based in Mumbai, said. “Both buyers and sellers are clueless on when things will normalize.”
Alwaleed Ali, who owns AGP Innovations Co Ltd, a gum Arabic exporting business, said his customers are looking for alternative countries to source gum Arabic.
He said he sells the gum to Nexira SAS, based in Rouen, France, and Westchester, Illinois-based Ingredion Inc, two significant ingredients suppliers to makers of products such as pet food, fizzy drinks and nutrition bars.
A spokesperson for Ingredion said in an email, “We have proactive measures in place across our business to ensure the continuity of supply for our customers.”
PepsiCo declined to comment on supply chain and commodity issues, while Coca-Cola did not return a request for comment.
“For companies like Pepsi and Coke, they can’t exist without having gum Arabic in their formulations,” Dani Haddad, marketing and development director of Agrigum, a global top-ten supplier, said.
In their manufacturing process, food and drink companies use a spray-dried version of the gum that is powder-like, industry sources said. While cosmetics and printing manufacturers may be able to use substitutes, there is no alternative to gum Arabic in fizzy drinks, which prevents ingredients from separating.
As a sign of its importance to the consumer goods industry, gum Arabic has been exempt from U.S. sanctions against Sudan since the 1990s because it’s a critical commodity and for fear of creating a black market.
Sudanese nomads tap the pebbly, amber-colored gum from acacia trees, then refine and package it throughout the country. According to Gum Sudan, it accounts for the livelihoods of thousands of people and the more expensive variety can cost about $3,000 a tonne.
There is a poorer quality, cheaper gum from outside of Sudan, but the preferred ingredient is only found in acacia trees in Sudan, South Sudan and Chad, Alnoor said.
Fawaz Abbaro, the general manager of Savannah Life Company in Khartoum, said he had purchase orders and plans to export 60 to 70 tonnes of gum Arabic but doubts he’ll be able to due to the conflict.
“It’s not stable even to get food or drink. It’s not going to be stable for business,” Abbaro said. “All trading will be jammed for the time being.”
