The US Drug Enforcement Administration’s annual report charts evolving market forces in the supply and demand of narcotics, with cocaine imports to the United States falling even as Mexican cartels switch operations towards trafficking more methamphetamine and heroin.

According to the Drug Enforcement Administration’s (DEA) 2013 National Drug Threat Assessment (pdf), cocaine seizures along the southwest border dropped significantly in 2012, from 16.9 tons in 2011 to 7.1 tons in 2012, a reduction of 58 percent. Combined with reports of lower availability in various regions, the DEA concludes this represents a drop in cocaine trafficking.

The DEA attribute this drop to counterdrug efforts disrupting Colombian traffickers’ supply lines, fighting between Mexican cartels, which scale back trafficking operations until violence abates, and falling cocaine production in Colombia. It also notes an increasing reluctance on the part of drug traffickers to move large shipments for fear of seizure.

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However, the report noted that the methamphetamine trade is moving in the opposite direction, with prices dropping 70 percent between 2007 and 2012 and purity increasing almost 130 percent. According to the DEA these indicators of greater availability are accounted for by increased meth production in Mexico.

There are also worrying signs that Mexican cartels are ramping up heroin production and distribution. Heroin availability continued to rise in 2012, according to the report, which states this is most likely as a result of an increase in Mexican heroin production and smuggling, indicated by rising border seizures of both Mexican produced heroin and heroin produced in South America and smuggled through Mexico.

meth deaThe DEA also noted that Mexican traffickers appear to be expanding into the eastern and Midwest markets, which are traditionally supplied by white heroin produced in South America, not the black tar normally found in Mexico.  Here the conclusion is that the Mexican cartels are looking to increase their role in the white heroin trade.

Mexican cartels also continue to supply much of the country’s marijuana, although the rise in marijuana availability is more likely linked to growing domestic cultivation, the report noted.heroin dea

However, the DEA identifies the biggest drug threat as coming from the controlled prescription medicines (CPDs), with abuse widespread — second only to marijuana — and growing rapidly, while the drugs are responsible for more overdoses than any other substance. The CPD market, it notes, is not controlled by drug cartels but by rogue pain management clinics — commonly referred to as pill mills.

InSight Crime Analysis

As the DEA has outlined, there are numerous possible reasons for falling cocaine imports into the United States, among them the disruption of Colombian networks. Numerous main players in the Colombian underworld have been hit hard in recent years, most notably through the implosion of the Rastrojos and the arrest of Daniel “El Loco” Barrera. At their peak, the Rastrojos and Barrera, who frequently worked together, ran one of the most important Colombian trafficking networks.

It is also possible that the Mexican cartel wars have affected supply, as suggested, as rivals target each other’s supply lines or organizations lose control of trafficking routes or scale back operations to protect their interests.

A more worrying, and quite likely, possibility is that, as the DEA speculated, seizures are falling because cartels are moving smaller shipments in order to minimize losses in the face of greater interdiction efforts.

Of the reasons offered by the DEA, the least plausible is the reduction in Colombian cocaine production. Although production has been falling, it is still more than enough to meet demand, while Mexican cartels are quite capable of buying product in Peru — now the world’s principal cocaine producer.

It is also worth noting that cocaine consumption has been falling in the United States but rising elsewhere — especially in Europe. There have been numerous indications that Latin American organized crime groups have been responding to these market forces by increasing efforts to access markets outside of the United States, so a drop in US exports could simply be a result of refocusing efforts on increasingly lucrative and less closely monitored markets.

The other trends highlighted by the DEA in increased heroin and methamphetamine production are worrying. These indicate a strategy of diversification of revenue streams by the cartels, and the more diverse their income sources are, the more difficult it becomes to attack their revenues through focusing on one area alone.

Comparing the DEA report with another recent study examining long term trends in the drug market, carried out by the British Medical Journal, it is clear the apparent successes in reducing US cocaine imports in this year’s report should be approached with caution.

Between 1990 and 2007, cocaine purity increased by an estimated 11 percent, according to the BMJ, while price decreased by 80 percent. However, between 2007 and 2009 (the last year looked at in the study), these trends began to reverse. Seizures of cocaine in or destined for the United States decreased by 49 percent between 1990 and 2011.

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These findings highlight how recent shifts in patterns should be considered in the context of long term trends of rising cocaine purity and falling prices. They also show that seizures, which have been falling for some time, have not always had a direct correlation with price and purity, suggesting they cannot be taken alone as an accurate marker for trafficking levels and availability.

In comparison, and meshing with the DEA’s finding, the purity and potency of heroin and marijuana have risen substantially over the period covered, while prices have fallen.

Looking at the reports in tandem it is clear that there have been serious upheavals in the world of drug trafficking world over the last few years, and that the US cocaine supply appears to be falling. However, it is also clear that it is too soon to say whether this is part of a long term trend or if it is a short term fluctuation based on shifting consumption patterns and changes in the underworld — the latter of which in particular can change rapidly.

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