Sitting in London or New York, in rooms full of flashing flat screens—two and three to a desk—while people talk on the phone and run around in expensive suits, it’s hard to remember that sometimes the sugar that’s being traded in these ivory towers isn’t destined for Silvertown or Dubai but for the desperate streets of places where war truly is hell.
Reuters last week picked up on the fact that Egypt is taking advantage of its pole position in the region as the eye of the storm in a zone full of conflicts. It could become the sugar kingpin of war.
Egypt is taking some of its white sugar production and exporting it to Libya, Sudan and perhaps even Syria, due to the fact that the latter’s two sugar factories no longer seem to be operating. Reuters quoted an analyst as saying that Egypt’s imports between March 2011 and March 2012 were up at 1.4 million tonnes compared to the traditional 1 million tonnes for the period. As conflicts escalate, so too could those imports.
Sudan has sugar production of its own but has a supply deficit of about 600,000 tonnes and three wars: Darfur, which has quieted some but is still going on; the restart of the conflict with South Sudan despite its having separated last year; and of course, the revolution going on in the North.
Sudan pretends to not be worried about the sugar supply and goes about its business, with its big opening of the White Nile Sugar Factory last month that was several years delayed only partly due to US sanctions while it is busy signing cooperation agreements on production and technology transfer for sugar with the Central African Republic of all places. Yet the strong dollar is fighting against a Sudanese Pound that recently sunk to its lowest levels, meaning that despite the government’s push to subsidise sugar prices—especially during Ramadan—that it may well be a losing battle.
Like Sudan, many of those conflict zones where Egypt is likely supplying are almost entirely in the middle of Ramadan, one of two times during the Muslim calendar when sugar consumption is at its highest. Before the Eid sets in, you’ve got a potent combination for trade. Then there’s Syria who is having a hell of a time trying to get access to LOCs because of sanctions, and so may or may not be successful in getting raws from Brazil via Bunge, but it begs the question as to how it would be refined if their factories are shut, even if they manage to get the funds. That in the end could mean more demand from Egypt.
In Somalia, where the war in Mogadishu rages on while the world forgets, the UN’s World Food Programme is still working to supply basic foodstuffs there for 1.9 million people this year. In Syria it aims to feed 850,000 people per month but in July only reached 542,000. From Iraq to South Sudan, it’s busy trying to supply in a world with higher prices and fewer donors. Annually the WFP is buying more than 2.5 million tonnes of food for its programmes worldwide, with more than 70% bought directly from developing countries close to where the delivery point is. In 2011, it bought 34,500 tonnes of sugar alone.
But the WFP is far from the only organisation buying sugar and distributing it to these war torn areas. The Turkish Red Crescent society alone recently sent 2,000 tonnes of sugar to Somalia while the Mohammed bin Rashid Al Maktoum Charity and Humanitarian Foundation gave away 135 tonnes of sugar during Ramadan for the poor in UAE and more to the poor in Somalia, Palestine, Iraq, Egypt, Mauritania, India, Afghanistan, Ghana and Uganda.
The Red Cross may have been successful in getting food into Syria in the past week but it’s not clear if they made it in or not. Trucks from the Palestinian Authority in the Red Bank tried earlier this month to get into Syria to deliver sugar and other food stuffs into Palestinian camps there but they may not have made it either.
The fact is that these war zones in the Middle East and North Africa are far from the only ones going on. Warsintheworld.com says there are 51 ongoing wars right now in Africa, Asia and Latin America. And all of them are demanding sugar. If there was a way to track and add up these individual donations and trades to these war zones from charities and donor agencies, the total would be significant. The trade figure might even be staggering.