How Sudan’s Civil War Matters To M&Ms, Coke

The gruesome civil war in Sudan might seem like a problem far from home, given the tiny size of the economy and its relative strategic importance.

However, the ongoing calamity, which shows few signs of abating will, in all likelihood, impact the supply or prices of candy.

When it’s not warring, Sudan is the top source of gum arabic, producing an estimated two-thirds of global supply, which in turn is heavily controlled by the Sudanese government. That begs the question of who’s in charge right now.

The gum, which is also produced in other countries such as Senegal, Chad, Mali, and Burkina Faso, is made from the sap of a type of acacia tree and is vital in the production of many foods and some fizzy soft drinks.

For instance, some Coke and Pepsi products contain gum arabic as a sugar stabilizer. Likewise, confectioners use the gum as a stabilizer, for instance in M&Ms.

Of course, not all food companies source their gum arabic from Sudan. But the lack of supply coming out of Sudan means the global volume of available gum will be far lower. Global stockpiles are now down to as low as three months, according to a recent report from Reuters. Risks of ultra-low inventory levels will likely keep gum prices gum elevated. That’s the nature of commodity markets: Supply disruptions tend to push up prices.

What does this mean to you? It’s hard to say. Probably, one way or another food companies will need to pass on any price increase to consumers. For many products the cost difference may be negligible and not worth worrying about. The aluminum can for a soda is far more expensive than the cost of adding some gum.

Perhaps more important questions about future gum supplies are how long the Sudanese civil war will last and whether it will spread to Chad and make the gum arabic supply disruption worse.