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GUM ARABIC EXPORT IN NIGERIA; NON-OIL EXPORT OPPORTUNITY SERIES.
Though the second leading exporting nation for Gum Arabic in the world, Nigeria is yet to take advantage of the vast opportunity that exist in the export and value addition of Gum Arabic.
Nigeria’s actual production of gum Arabic which is estimated at over 19,000 does not reflect her potentials which can be harnessed by harvesting more products from the wild.
Gum Arabic (Acacia Senegal) Gum Acacia, also known as Gum Arabic, is a natural gum harvested from the exterior of Acacia trees in the form of dry, hard nodules up to 50 mm in diameter, and ranging from almost colourless to brown.
FACTS ABOUT GUM ARABIC
History: In most of history, Gum Arabic has been used for cooking and medicinal purposes, as well as for making of ink used in illuminated manuscripts.
Estimated National Production: Nigeria produces about 19,000 MT of Gum Arabic annually.
Export from Nigeria: Nigeria is the second leading exporter of Gum Arabic in the world.
Types: There are there grades of Gum Arabic, Grade 1, 2, and 3.
Uses: Gum Arabic is used as thickener, suspender, emulsifier, stabilizer, flavour carrier, binder and encapsulating material. In addition, it is used in confectionaries, food, beverages, pharmaceuticals and chemical industries.
Areas of Production: Production of Gum Arabic covers 14 States of the Federation namely Borno, Yobe, Jigawa, Bauchi, Gombe, Taraba, Plateau, Adamawa, Sokoto, Kebbi, Katsina, Zamfara, Nasarawa and Niger with an estimated population of 4 million Nigerians engaged in its cultivation and trade.
There are over 1,100 Acacia species worldwide. However Acacia Senegal and Acacia Seyal are the most commercially exploited species.
Nigeria has three grades of Gum Arabic namely; Acacia Senegal (grade 1) Acacia seyal (Grade 2)and Combretum (Grade 3).
The major Acacia utilized for commercial Gum Arabic production in Nigeria are Acacia Senegal and Acacia seyal. Nigeria is the 2nd largest producer of the crop in the world after Sudan with average production of 20,000 metric tonnes of all grades of Gum Arabic.
In the year 2004, world production of Gum Arabic was put at 70,000 metric tonnes while Nigeria's production amounted to 18,935 metric tonnes with export earnings of US$88.08 million.
Gum Arabic is used for its properties as an emulsifier, thickener, binder, stabilizer and adhesive. It is believed that soft drinks and confectionary represent 70 percent of the demand for gum arabic.
Gum arabic is generally used as an additive which represents a small portion of the cost of the finished product. It is regarded by end users as having technical advantages which makes it difficult to replace completely in many applications.
This makes demand for gum quite price inelastic; supply is the key factor on the demand side.
Demand for gum arabic is driven up by the increasing world consumption of soft drinks and sweets. It is reinforced by the attention given by consumers to food products’ quality and naturalness. Because of its high fiber content, gum arabic has recently found a new range of applications in the dietetic food and health sub-sectors.
Four processors account for about 70 percent of the world trade of raw gum. Based in Europe and the USA, they buy raw gum for further transformation and re-sale as additive for the industry. The USA is the largest single market for gum arabic, accounting for approximately 30 percent of the total trade. Europe is around 20 percent of the world trade.
Confectionary represents the major use for gum in Europe while soft drinks production is the largest in the USA. Japan accounts for a little less than 10 percent of world trade. India, South Korea and China are emerging markets; it is believed that the demand from these countries is mainly for talha.
The return on investment on the export of Gum Arabic is estimated between 10%- 15% .
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GUM ARABIC EXPORT IN NIGERIA; NON-OIL EXPORT OPPORTUNITY SERIES.
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