Recently, media reported that the price of Coca-Cola has risen again, and the reason behind it may be related to the shortage of gum arabic, one of the raw materials of cola.

In fact, as early as 2007, when Sudan was facing US trade sanctions, the then Sudanese ambassador to the United States, Ukochi, held up a bottle of Coca-Cola in Washington and told reporters at the scene: "If we stop the export of gum arabic now, everyone will not be able to drink this in the future." ”

Few people know that in many carbonated drinks, sweets, red wine, cosmetics, soap and other products, gum arabic is widely added as a harmless and edible raw material. Many well-known international brands use gum arabic, and Sudan controls more than 70% of global gum arabic.

Today, Sudan's internal conflict has not completely subsided, with more than 70,604 displaced people and at least <> dead. The conflict has also brought the supply chain of gum arabic to a near-complete halt, not only putting international giants like Coca-Cola and Nestlé under potential upward cost pressure, but also putting millions of Sudanese people who depend on the industry to make a living in a dilemma.

Difficulty in supplying gum arabic Receiving "one price a day"

According to the latest disclosed data, in 2021, Sudan exported about 8,8 tons of gum arabic, generating $1 million in foreign exchange and a national GDP of $1.343 billion that year. At present, gum arabic has surpassed oil as the most important source of foreign exchange income for Sudan. In view of the importance of gum arabic to the global food and beverage and daily chemical industries, the United States has always listed gum arabic as an "exempted commodity" in previous decades of economic sanctions against Sudan.

Gum arabic is a gum secreted by trees, mainly produced in the African "gum belt", spanning Chad, Ethiopia, Eritrea and other countries, but almost all of the essence production areas are in Sudan. The price of gum arabic varies greatly between different qualities, such as Gum Sudan, a Sudanese gum arabic manufacturing company, which can easily sell for $3000,1 a ton; On the AliExpress website, the cheapest offer found by Red Star News reporters was only $5.<> a ton.

Although gum arabic is painstakingly raised and harvested by Africans, Western consumer goods giants do not buy directly from farmers, but from "middlemen" mainly distributed in Europe and the United States.

Dutch importer Martin Bergkamp said they were accustomed to the fluctuating prices of gum arabic imports due to perennial instability in Sudan. Arur, head of the American Gum Arabia Industry Association, said, "At present, because there are roadblocks everywhere in Sudan, and the gunfire has not completely stopped, it is almost impossible to have a new supply." A dealer in Mumbai, India, said, "Neither buyers nor sellers now know when it will be back to normal." ”

British businessman Danny Haddad is a merchant in the gum arabic raw material market and has his own purification and processing factory. Haddad said that after the outbreak of the conflict in Sudan, the country's merchants' offers rose by more than 50% overall, and prices often "changed every day." Once he reached an agreement with someone on Friday, the next Monday the other party changed his mind and offered a higher price.

The US financial media pointed out that due to the fact that international "middlemen" generally have gum arabic stockpiling, terminal manufacturers will not immediately run out of inventory. But if the domestic situation in Sudan does not stabilize soon, the price of gum arabic may rise sharply, and cost pressure will be transmitted from the upstream of raw materials to the price of consumer goods.

For companies like Coca-Cola and PepsiCo, it's impossible to have gum arabic missing in their product formulations, and it's hard to quickly find alternatives.

At present, no consumer goods giant has explicitly admitted that the source of the price increase comes from the increase in the price of gum arabic, but a spokeswoman for Nestlé told the media that in order to prevent bottlenecks in the supply of gum arabic in the future, the company has begun to study a set of countermeasures.

Blocked exports, environmental degradation Sudanese face livelihood problems

For global consumers, the supply chain problems of gum arabic, a key raw material, may bring the trouble of rising commodity prices; But for millions of Sudanese, the disruption of gum arabic exports has put them under more immediate pressure to survive.

According to the latest figures, Sudan's GDP per capita is only $751. According to British and Dutch media estimates, about 100 million families in Sudan directly or indirectly depend on the gum arabic industry for their livelihood, involving up to 500 million people, many of whom have an annual income of less than 900 US dollars (about 6336 yuan).

At present, although Port Sudan, which is exported to the outside world, has maintained a certain degree of normal operation, the export of gum arabic basically needs to pass through the capital Khartoum, which has been affected by the conflict and it is difficult for goods to pass.

For Sudanese in the growing areas, the perennial deterioration of the natural environment has made it very difficult for them to survive, even without conflict. Affected by climate warming, the vast "gum field" of about 50,2 square kilometers in Sudan has warmed by about <> degrees Celsius in less than three decades, far exceeding the global average. Rising temperatures have brought about drought and desertification, which not only affect gum arabic production, but also make the harvesters face a harsher working environment.

Chengdu Business Daily - Red Star News reporter Zheng Zhi