MARKET STRUCTURE, COMPETITIVENESS AND TRADE FLOW OF SUDANESE GUM ARABIC IN THE INTERNATIONAL MARKET

Abstract

Gum arabic, a non-timber forest product exuded by Acacia senegal and Acacia seyal, has anchored Sudan’s rural livelihoods and macroeconomy since the 1960s. Despite possessing an irreplaceable ecological endowment across the gum belt, Sudan faces a widening gap between its natural comparative advantage and actual export performance due to prolonged conflict, climate variability, poor infrastructure, and certification deficits. This study aims to analyze: (1) the global market structure and concentration; (2) the evolution of Sudan’s competitiveness through RCA and DRCA; and (3) the determinants of bilateral trade flows and market expansion opportunities using a gravity model over 2012–2024. Addressing the first objective, the market structure analysis reveals a fundamental transformation from concentrated oligopoly to fragmented competition. The Herfindahl-Hirschman Index (HHI) collapsed from 2,869.34 in 2016 to 922.68 in 2024, while the four-firm Concentration Ratio (CR4) fell from 76.80 % to 41.50 %. This de-concentration reflects destructive fragmentation caused by the April 2023 conflict, which diverted formal supply chains into smuggling routes through Chad and Egypt rather than signaling healthy competitive entry. France consolidated its dominance as the leading exporter by value (USD 254.5 million in 2024) through advanced processing, while Chad and Mali emerged as “Rising Stars” under AfCFTA integration, threatening permanent market share loss for Sudan. Addressing the second objective, the competitiveness assessment exposes a severe competitiveness paradox. Sudan’s Revealed Comparative Advantage (RCA) remained extraordinarily high, consistently exceeding 1,000 and peaking at 2,583.83 in 2016, indicating extreme specialization unmatched by competitors. However, the Dynamic RCA (DRCA) trajectory reveals a turbulent path: “Falling Star” (2012–2015) as political instability eroded momentum; “Lost Opportunity” (2015–2018) when macroeconomic crisis prevented capitalization on surging global demand; “Leading Retreat” (2018–2021) as revolution and currency collapse accelerated export contraction; and a fragile “Rising Star” recovery (2021–2024) driven by resilient pharmaceutical demand rather than structural improvements. These findings demonstrate that natural comparative advantage is insufficient for sustainable competitive performance when institutional fragility disrupts supply chains and market access. Addressing the third objective, the PPML gravity estimation identifies precise determinants of bilateral trade flows. The tariff coefficient is significantly negative (–0.1674; p < 0.01), indicating that a one-percentage-point tariff increase reduces export value by 0.167 %. The export price coefficient is positive (0.7417; p < 0.05), signaling inelastic demand for this high-value differentiated commodity, while the RCA coefficient (0.2067; p < 0.05) validates that accumulated specialization enhances performance. Notably, the Logistics Performance Index is statistically insignificant (p = 0.721), confirming that regulatory trade barriers not physical infrastructure has become the binding constraint. The Trade Potential Ratio analysis identifies India as the largest unrealized opportunity (TPR ˜ 83, a gap exceeding USD 10.5 million), followed by the United States (˜ 4.3) and Italy (˜ 7.2). France, conversely, exhibits over-performance (TPR = 0.232) reflecting risky dependence on colonial-era re-export channels. To close these structural gaps, Sudan is recommended to: (i) secure international certifications (FSSC 22000, organic) and build a national traceability system; (ii) establish direct commercial representation in India and the EU to bypass French intermediaries; (iii) expand domestic spray-drying and encapsulation capacity to capture downstream value; and (iv) leverage AfCFTA and GSP tariff preferences for market diversification. The successful implementation of these measures will determine whether Sudan converts its ecological comparative advantage into durable competitive performance or continues toward marginalization in the global market.