* Gum arabic exempt from U.S. trade embargo
* So Sudan remains world power in the industry
* Export success shows country's farming potential
* But Sudan faces competition from other African countries
* Low farmer incomes threaten labour shortage
By Ulf Laessing
EN NAHUD, Sudan, Jan 2 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
"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.
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 much 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 army in three farming regions of Sudan, Darfur, Blue Nile
and South Kordofan, has also hit production.
"Several other countries came in and competed, Chad,
Nigeria...," said Mahdi. So Sudan's global market share could
have fallen to between 20 to 40 percent, though its gum arabic
is still first choice among many consumers because of its high
quality, she said.
En Nahud is the last town in western Sudan before a
traveller reaches the troubled region of Darfur - the paved road
ends here after a 12-hour drive from Khartoum. United Nations
food aid trucks continue their trip to Darfur on dirt tracks
only after taking armed escorts on board.
But while En Nahud may at first glance look as desolate as
other small Sudanese towns, with many of its one-storey brick
buildings built during British colonial rule, it is wealthier
because of gum arabic.
A large market attracts hundreds of farmers and traders
every day. Shops are well-stocked with foreign food products,
and restaurants are bustling with people eating meat for
breakfast - a luxury for many Sudanese who have to rely on ful,
a staple food made of bean and water.
"We traded 9,000 tonnes of gum arabic last year...Prices are
on the rise," said Hashem Umbada, head of a local agricultural
bourse where gum arabic, beans and other products are auctioned.
In the nearby state capital El-Obeid, a Sudanese firm, one
of many newcomers since the government ended a state monopoly on
the business in 2009, is building a plant to refine and clean
the gum arabic so it can fetch higher prices. Currently, women
in a warehouse dust it off before it gets packed into sacks.
Gum arabic enriches a range of people on its route as it is
loaded on trucks in En Nahud for a long journey to Port Sudan,
where it is transferred to ships. Farmers doing the arduous
field work struggle to get their share of the boom.
"There are so many middlemen," said Mahdi, the economist in
Khartoum. "They buy at very cheap prices. They put their fat
share on it and the government puts its fat share on it in terms
of duties and taxes."
On a tree plantation outside En Nahud, reached only via
unpaved roads lined by thatched houses, village farmer Mohammed
Adam says he makes 4,000 pounds a year from his crop.
"We wish we could benefit from gum arabic like the
exporters," said Adam, who belongs to one of 3,000 gum arabic
associations in Sudan. To feed his family, he also cultivates
The 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. Many labourers who used to work
for Adam prefer, like an estimated half million Sudanese, to dig
for gold in the desert.
"We need workers for the tapping, but it's difficult to get
them because they search for gold and they are expensive," Adam