Counting piles of bills in front of his tiny warehouse, Sudanese trader Maaz Adam is arranging yet another purchase of a red gum which may find its way into a bottle of soda drunk a world away from his dusty town.
“I bought today 25 sacks for around 10,000 to 11,000 [Sudanese] pounds [about US$1,500 at the black market rate],” he said.
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 Sudanese pounds per large sack, three times as much as he paid two years ago. Used as an emulsifier to prevent sugar from crystallizing in carbonated 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 mobilize more of its vast areas of arable lands and agricultural resources.
Because gum arabic is so important to the soft drinks and other industries, the US has exempted it from a trade embargo which it 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 that farmers will produce up to 80,000 tonnes of gum arabic in the current season, after enjoying plenty of rain. 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 cite higher demand from abroad compared with previous years.
“We have new markets,” said Fatma Ramli, the association’s national coordinator. “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 its western border with Chad to Ethiopia, to the east. En Nahud lies in the main farming state of North Kurdufan, which alone is expected to produce 40,000 tonnes in the season ending 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,” economist Abda el-Mahdi said.
Sudan earned US$81.8 million from exporting 45,633 tonnes of gum arabic in 2011, up from US$23.8 million on 18,202 tonnes in 2010, Sudanese central bank data show. Subsequent price and volume increases suggest it might earn more than US$200 million this year.
That would still be only a small fraction of the billions of US dollars which Sudan lost because of the secession of the south. In 2010, the last year before secession, Sudan earned at least US$5 billion in oil revenues.
There is little reliable production data for gum arabic, 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 too high.
Sudanese farmers, who often produce gum arabic in small groups with little efficiency, risk losing out to growing competition from other countries. Fighting between rebels and the Sudanese army in the Darfur, Blue Nile and South Kurdufan farming regions has also hit production.