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LONDON/NEW YORK: Sudan’s eruption into conflict has left international consumer goods makers racing to shore up supplies of gum arabic, one of the country’s most sought-after products and a key ingredient in everything from fizzy drinks to candy and cosmetics.
About 70% of the world’s supply of gum arabic, for which there are few substitutes, comes from the acacia trees in the Sahel region that runs through Africa’s third-largest country, which is being torn apart by fighting between the army and a paramilitary force.
Wary of Sudan’s persistent insecurity, companies dependent on the product, such as Coca Cola (KO.N) and Pepsico (PEP.O), have long stockpiled supplies, some keeping between three-to-six-months worth to avoid being caught short, exporters and industry sources told Reuters.
However, prior conflicts have tended to be focused in far-flung regions such as Darfur. This time, the capital Khartoum has been brought to a standstill in the fighting that broke out on April 15, paralysing the economy and disrupting basic communications.
“Depending on how long the conflict continues there may well be ramifications for finished goods on the shelf – branded goods made by household names,” said Richard Finnegan, a procurement manager at Kerry Group (KYGa.I), a supplier of gum arabic to most major food and beverage firms.
Finnegan estimated that current stockpiles will run out in five-to-six months, a view echoed by Martijn Bergkamp, a partner at Dutch supplier FOGA Gum who estimated between three-to-six months.
Cloetta AB, (CLOEb.ST) a Swedish confectioner which makes Lakerol lozenges that use gum arabic, has “ample” stock of the ingredient, a spokesperson said in an email.
Global production of gum arabic is about 120,000 tonnes a year, worth $1.1 billion, according to estimates cited by Kerry Group. Most is found in the “gum belt” that stretches 500 miles from the East to the West of Africa where the arable land meets the desert, including in Ethiopia, Chad, Somalia and Eritrea.
Twelve exporters, suppliers and distributors contacted by Reuters said trade in the gum, which helps bind together food and drink ingredients, has ground to a halt.
Right now it’s “impossible” to source additional gum arabic from rural parts of Sudan because of the turmoil and road blockages, said Mohamad Alnoor, who runs Gum Arabic USA, which sells the product to consumers as a health supplement.
‘CAN’T EXIST WITHOUT GUM ARABIC’
Kerry Group and other suppliers, including Sweden’s Gum Sudan, said communicating with contacts on the ground has been difficult and Port Sudan – from where product is shipped – has been prioritising civilian evacuations.
“Our suppliers are struggling to secure necessities because of the conflict,” Jinesh Doshi, managing director of Vijay Bros, an importer based in Mumbai, said. “Both buyers and sellers are clueless on when things will normalise.”
Alwaleed Ali, who owns AGP Innovations Co Ltd, a gum arabic exporting business, said his customers are looking for alternative countries to source gum arabic.
He said he sells the gum to Nexira SAS, based in Rouen, France, and Westchester, Illinois-based Ingredion Inc (INGR.N), two major ingredients suppliers to makers of products such as pet food, fizzy drinks and nutrition bars.
A spokesperson for Ingredion said in an email, “We have proactive measures in place across our business to ensure the continuity of supply for our customers.”
PepsiCo declined to comment on supply chain and commodity issues, while Coca-Cola did not return a request for comment.
“For companies like Pepsi and Coke, they can’t exist without having gum arabic in their formulations,” Dani Haddad, marketing and development director of Agrigum, a global top-ten supplier, said.
In their manufacturing process, food and drink companies use a spray-dried version of the gum that is powder-like, industry sources said. While cosmetics and printing manufacturers may be able to use substitutes, there is no alternative to gum arabic in fizzy drinks, where it prevents ingredients from separating.
In a sign of its importance to the consumer goods industry, gum arabic has been exempt from US sanctions against Sudan since the 1990s, both because it’s a critical commodity and for fear of creating a black market.
Sudanese nomads tap the pebbly, amber-colored gum from acacia trees, which is then refined and packaged throughout the country. It accounts for the livelihoods of thousands of people and the more expensive variety can cost about $3,000 a tonne, according to Gum Sudan.
There is a poorer quality, cheaper gum from outside of Sudan, but the preferred ingredient is only found in acacia trees in Sudan, South Sudan and Chad, Alnoor said.
Fawaz Abbaro, the general manager of Savannah Life Company in Khartoum, said he had purchase orders and plans to export 60 to 70 tonnes of gum arabic but doubts he’ll be able to due to the conflict.
“It’s not stable even to get food or drink. It’s not going to be stable for business,” Abbaro said. “All trading will be jammed for the time being.”
DUBAI: Wynn Resorts Ltd. said they will be opening their new resort in Ras Al Khaimah at an estimated cost of $3.9 billion in a step that could contribute to the emirate’s rise as a major global tourist destination.
The luxury resort has recently unveiled plans and renderings in a presentation shared on its website for the development in Ras Al Khaimah, UAE.
Wynn Al Marjan will also be the first to include gaming in the Middle East. It is believed that it will become one of the world’s largest gaming facilities.
The property will include multiple resort amenities, including 1,500 hotel rooms and suites and will feature several high-priced villas with beachfront access.
Wynn CEO Craig Billings said during the presentation that the property will have 24 restaurants and lounges and other non-gaming amenities, including 120,000 square feet of retail space.
The development will see a 1,000-foot-tall hotel tower rising above the island’s shoreline.
Billings also said they wanted the design to stand out in the region, taking into consideration that the UAE is well-known for its unique architectural buildings and monuments.
The company asserts the project will bring meaningful long-term economic benefits to Ras Al Khaimah, supporting economic growth and diversification of tourism.
It also said the development, while supported by continued investments, is expected to support Ras Al Khaimah’s goal of achieving an increase in tourism, aiming for over 30 million tourists by 2030.
The opening, originally slated for 2026, will be delayed by a year, Wynn said in the statement.
RIYADH: Despite escalating geopolitical tensions and the resulting economic slowdown, global oil demand is expected to increase by 2.3 million barrels per day in 2023, a top official from the Organization of Arab Petroleum Exporting Countries told Independent Arabia.
Jamal Al-Loughani, the recently appointed secretary-general of the organization, based his optimistic outlook on the recovering demand from members of the Organisation for Economic Co-operation and Development, as well as China, and India.
He did warn though that global developments will have an impact on the overall growth of the oil sector, as central banks around the world are increasing interest rates to tame rising inflation.
Speaking to journalist Ghaleb Darwich, Al-Loughani said the imbalances created as a result of the Russia-Ukraine conflict continue to recede and the tightening of monetary policies by most central banks is expected to pay off.
Commenting on the move by some countries to withdraw crude from their respective reserves to strike a balance between supply and demand in the oil market, the secretary-general said this strategy may not prove to be very effective in the long run, as ultimately they need to be replenished.
Echoing views expressed by most major oil exporters, the official stressed the need for investment in the oil sector to ensure energy security in the future.
Al-Loughani said the growing geopolitical tensions in Eastern Europe and the related decisions will undoubtedly affect the foundations of the global oil market in terms of demand and supply, which may lead to an increased intervention by EU countries and their allies.
Referring to the price cap on Russian crude, the secretary-general said that it led the Kremlin to cut its production by 500,000 bpd.
He warned such tit-for-tat moves will only deplete strategic reserves — further tightening the market.
The OAPEC official said Saudi Arabia is working hard to support the stability of the oil market, which is necessary to achieve sustainable growth of the global economy.
He said the issue of insufficient investments in the global oil sector continues to pose a threat to future energy security and has led to a slowdown in the growth of oil reserves, due to a lack of exploration and production activities.
Al-Loughani also highlighted the insistence of various European countries and members of the International Energy Agency to reduce the consumption of fossil fuels to cut carbon emissions.
The official said it should be understood that fossil fuels can be used as part of the solution to mitigate the effects of climate change.
A large number of Arab countries are focusing on renewable energy, he said, adding that Saudi Arabia, being the largest oil-producing country, is at the forefront of the clean-energy efforts.
Al-Loughani said the Kingdom has launched the Saudi Green Initiative to achieve net-zero goals and is a pioneer in adopting the concept of a circular carbon economy.
To accelerate the pace of sustainable development and protect the global climate, he added, Riyadh seeks to diversify its energy mix by producing 50 percent electricity using renewable sources by 2030 — thus significantly reducing carbon emissions.
He also cited the Middle East Green Initiative as an example of Saudi Arabia seeking to ensure the region achieves the goal of reducing emissions.
RIYADH: Saudi Arabia’s customs authority showed off the tools it has used to get clearance time at the Kingdom’s borders to just two hours during an industry event in Singapore.
The Zakat, Tax and Customs Authority participated in the Sea Asia 2023 exhibition, which specializes in marine industries and products, and presents commercial opportunities in transport and maritime shipping, according to the Saudi Press Agency.
The event played host to nearly 15,000 international participants, as well as more than 400 exhibitors representing over 70 countries.
During its participation in the exhibition, ZATCA reviewed the customs services it provides and the solutions related to facilitating trade.
According to the SPA: “ZATCA’s participation emanates from its keenness to enhance communication with stakeholders in events, exhibitions, and conferences specialized in the areas of zakat, tax, and customs, and to meet with counterparts in other countries to exchange experiences.
“Its participation also reveals its role in strengthening the logistics sector in the Kingdom through its customs services, and its ambition to achieve the Kingdom’s vision to become a global logistics platform.”
ZATCA’s achievements in reducing customs clearance times were revealed by a top official at a conference organized by the authority in February.
Ammar Al-Salami, director general of the customs operations department, said the department had overseen an 84 percent drop in processing time by the end of 2022.
“We started in 2021 in January with about 13 hours (custom-clearance time) to end up with about two hours for clearance in 2022,” the director general said.
Back in 2017, customs clearance used to take around 12 days, Al-Salami added. He went on to explain that the clearance within the two-hour initiative is directly linked to the Kingdom’s Vision 2030 blueprint.
Moreover, the number of documents required for import has also been reduced to two, down from 12.