Availability of letters of credit (L/Cs) may be a factor behind Sudan becoming a regional entrepôt for sugar smuggling.

Sudan is now importing far more sugarthan it can consume after the removal of customs duties, while traders say that some sugar is being smuggled across the country's porous borders with neighbouringcountries suchas South Sudan and Chad.

Customs advantages

Khartoum removed customs duties and opened up sugar imports to the private sector in 2012 in response to shortages.

Traders told local media that sugar is smuggled across Sudan's borders into countries with higher customs duties and transport costs, including South Sudan, Chad, Eritrea and Egypt.

Import surplus

Estimates suggest that Sudan requires less than half of the 1.2 million tonnes ofsugar worth US$600 million the country is likely to import this year, suggesting around 550,000 tonnes will find its way illegally across the Sudanese border.

According to Sudanese traders, the illicit trade is made even more lucrative becausesugar is bought on the international market usingL/Cs with deferred settlement dates while the sugar smuggled to neighbouring countries is sold for cash.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.