Gov’t advised to embrace Gum Arabic for economic diversification

JUBA – The South Sudanese government has been advised to recommit investment in Gum Arabic as a second product to the global market to reduce reliance on oil, which is under threat amid the longstanding political crisis in Sudan.

Kuo Ajak Kuo, Secretary General of the South Sudan Gum Arabic Association (SSGAA), disclosed that the international market for gum Arabic is significantly superior to the sale of a barrel of crude oil.

He stated that a ton of crude oil is currently priced at $500 on the worldwide market, whereas a ton of Gum Arabic is currently priced at $3000 in Juba.

“A ton of Gum Arabic at the international market is promising and expensive than a ton of crude oil (i.e. 5 barrels of crude oil),” said Kuo in a just concluded Juba Economic Conference.

He noted that gum Arabic is still utilised today in the creation of cancer treatments and high-quality sheets used in the manufacture of currencies such as US dollars.

Mr. Kuo stressed that Gum Arabic does not require expensive infrastructure, as does oil production and transportation. He stated that it simply needs to be collected or harvested to export.

He claimed that the proportion of immunoglobulin in Arabic gum is 85%, which is seven times more than the amount in mother’s milk, increasing its demand in the international market.

The South Sudan Association of Gum Arabic claims that Gum Arabic, affirmed in three administrative areas and eight states in the country, with the exception of Western Equatoria and Western Bahr El Ghazal state.

According to Ajak Kuo, Gum Arabic from South Sudan is the greatest gum for cancer treatment.

The retail price range for US natural Gum Arabic is between US$ 3.88 and US$ 6.79 per kilogram or between US$ 1.76 and US$ 3.08 per pound (lb).

For instance, high-grade Gum Arabic (Hashab): $3,300–$4,000 per ton internationally, meanwhile, lower-grade (Talha): Around $1,600–$1,700 per ton.

According to Reuters, neighbouring Sudan produces around 80% of the world’s gum arabic, a natural substance harvested from acacia trees that’s widely used to mix, stabilise and thicken ingredients in mass-market products including L’Oreal (OREP.PA), opens new tab lipsticks and Nestle (NESN.S), opens new tab petfood.

Since then, the raw product, which can only be marketed by Sudanese traders in return for a fee to the RSF, is making its way to Sudan’s neighbours without proper certification, according to conversations with eight producers and buyers who are directly involved in gum arabic trading or based in Sudan.

In recent months, traders in countries with lower-gum arabic production than Sudan, such as Chad and Senegal, or which barely exported it before the war, like Egypt and South Sudan, have begun to aggressively offer the commodity at cheap prices and without proof it is conflict-free, two buyers who have been approached by traders told Reuters.

In 2020, South Sudan launched the exportation of its first consignment of 22 metric tons of Gum Arabic, also known as Gum Acacia Senegal, to the international market for the first time to diversify the economy.

The commodity was expected to arrive in the European market in December that year to mark the beginning of the government’s shift from total dependence on oil as the only source of revenue.

B-Yor Trading Company, in partnership with the Ministry of Trade and Industry, will spearhead the shipment and sale of the country’s first agricultural product in both national, regional and international markets at the time.

However, there have been limited notable efforts to sustain the initiative several years later as South Sudan’s economy struggles amid the disruption of oil exports, thanks to the conflict in Sudan.