Sudan scraps gum arabic monopoly to liberalise market
For nearly 50 years, the state-owned Gum Arabic Company has held the monopoly on exports, but on sliding figures the government has taken the decision to liberalise the business.
Obtained from Acacia trees in the gum-belt of Africa, the top producers - Sudan, Chad and Nigeria - bring about 45,000 tonnes of gum arabic to the market each year.
Sudan supplies more than two-thirds of global demand, in a world market valued, by Leatherhead Food International, at $210m in 2007.
But set against the backdrop of war-torn Sudan, trade for the country in this natural resource has become more challenging.
With the crumbling of structures across the country, the trust and confidence of buying companies in the world will, arguably, have been impacted.
A Reuters report last week quotes Sudanese government agricultural official, Mohammed Ali Dingel, as saying exports had fallen to about a third of the 30,000 tonnes a year the African state used to produce.
This is a situation that leading ingredients companies who supply gum arabic, such as Alfred L Woolf, have adapted to, ensuring stocks and supply channels to their customers.
"The market has existed for a very long time, and people involved in this very specific trade have their channels and sources in place. We know what we are buying, and from where," Anita Benech, at German gum firm Alfred L. Wolff, tells FoodNavigator.com.
And commenting on the move – a political and economic decision at the highest level – to dissolve the Gum Arabic Company (GAC), Benech says "I don't think it will change the face of current business".
Major importing ingredients firms on the ground in Sudan have established, and developed, their supply networks over a period of years, if not decades.
Alternatives to the 'Rolls Royce'?
Gum arabic is used widely by food and beverage formulators; particularly in confectionery categories, where it is included to delay or prevent sugar crystallisation and to emulsify fat.
Wherever film-forming and emulsifiying properties are required – without affecting taste or viscosity – gum arabic can often be found. Further, the emulsification properties of gum arabic are also used in various flavour emulsions.
Food and drink makers do have alternatives available in the form of gelatine and modified starches. Working in an increasingly tough environment, impacted by squeezed margins and growing consolidation, a new level of competitiveness appears to be opening up as starch and gelatine suppliers push to compete with gum arabic.
Faced with a step up in competition and eroding market share, gum arabic suppliers like French firm CNI and Germany's Alfred L Wolff have poured resources into campaigns to defend their product, both on availability and properties.
Price and properties are pivotal, with both gelatine and starch products undercutting gum arabic in price. But for gum arabic suppliers, their ingredient has 'value-added' strengths compared to the alternatives on the market.
"The world still needs and requires gum arabic: No other product is able to cover as many functionalities," added Benech.
