SABMiller to close South Sudan unit due to low forex supply

(Updates with background on South Sudan economy)

JUBA, Jan 15 (Reuters) - SABMiller (Xetra: BRW1.DE - news) will close its brewery in South Sudan in March due to difficulties in obtaining foreign exchange to buy raw materials, the company said on Friday.

Traders and ordinary South Sudanese have struggled to secure dollars to pay for even basic imports or other essential items as conflict that erupted in December 2013 has cut oil production and as global crude prices have slid.

SABMiller, which was bought by AB InBev last year, said in a statement that mothballing its South Sudan business would affect most of its 237 employees, but did not elaborate, and indirectly hit thousands of individuals and businesses.

The company's South Sudan operation was likely to be used to distribute beverages imported from Uganda, it said.

In mid-December, South Sudan abandoned its official fixed exchange rate and moved to a floating rate.

The central bank had held onto a fixed official rate of 2.95 South Sudanese pounds per dollar even as the currency weakened on the unofficial market after conflict erupted in December 2013. The central bank quoted the pound on Friday at about 18.70.

Further worsening the situation, inflation shot up to 109.9 percent year-on-year in December from 73.6 percent in November, mainly due to surging food prices, according to data from the statistics office. (Reporting by Joe Brock in Johannesburg and Denis Dumo in Juba; Writing by George Obulutsa; Editing by Ed Cropley and Susan Fenton)