The latest United Nations drug report poses a question with major implications for Latin American organized crime: is the global cocaine market shrinking?
The United Nations Office on Drugs and Crime (UNODC) 2016 World Drug Report (pdf) presents a long-term analysis of cocaine production, seizures and consumption that comes to a startling conclusion: the cocaine trade appears to be in decline.
According to the UNODC, coca cultivation fell by 40 percent between its 2000 peak and 2014. Better yields through improved farming and processing techniques meant cocaine production was less affected, either falling by just 10 percent or actually increasing by 14 percent, depending on which formula is used to calculate it.
However, whichever figure is used, deducting the quantity of cocaine seizures from production produces the same result -- significantly less cocaine on the market.
North America remains the world's biggest cocaine market but consumption has been declining for some time, according to the UNODC. Between 2006 and 2014, cocaine use in the United States fell significantly by all indicators; past year use fell by 32 percent, cocaine related deaths by 34 percent, and treatment admissions by 54 percent.
Trafficking also appears to have declined, with seizures falling 50 percent to 100 tons over the same period, the report states. However, trafficking patterns remain largely unchanged, with 90 percent of cocaine that reaches the United States originating in Colombia, and 87 percent arriving via the Central America-Mexico corridor.
The next biggest global market is Europe, where cocaine use is stagnating after a period of sustained growth that peaked in 2007, according to UNODC figures. However, on a national level this trend is shown for what it is -- not stability but constant flux between European countries, with several countries that previously registered high levels of cocaine use showing a decrease while some smaller countries with low levels showed an increase.
Colombia remains the principal source of this cocaine, accounting for 42 percent of cases, but, the UNODC notes, its importance in the market has been declining. Seizures in Europe have been gradually falling since 2012, with 60 tons captured in 2014.
While in the United States and Europe market growth appears to have reached a limit, other markets show signs of rapid growth, the UNODC states. Annual average cocaine seizures in Asia more than tripled over the periods 1998-2008 and 2009-2011, with Israel and China the most common final destinations. Over the same period, seizures in Oceania more than doubled, with 99 percent of them headed for Australia, while cocaine consumption levels in South America increased substantially.
Despite these regional variances, global consumption levels remained stable between 1998 and 2014 at between 0.3 and 0.4 percent of the population, the report states. However, factoring in population growth, this translates to an extra 4.3 million cocaine users -- a 30% increase. The UNODC's analysis attempts to address the contradiction this throws up; how can there be less cocaine on the market but millions of additional users?
The report suggests several theories to explain this. The data could be plain wrong, it notes, as both drug production and user rates are almost impossible to assess accurately, and the data on users in particular is extremely patchy on a global level.
However, it continues, while the data may not be 100 percent correct, it is unlikely to be so wildly inaccurate. This leads to another possibility -- that shifting market patterns around the world are accompanied by changing cocaine habits among users.
In established markets, there tend to be more heavy users, who buy the bulk of the market's cocaine even though they represent a small proportion of users, the report states. In contrast, users in emerging markets tend to take less cocaine less often, so per capita usage is much smaller.
The UNODC comes to the conclusion that "the global cocaine market has indeed been shrinking," attributing this to declining production in South America and consumption in the United States and, to some extent, Europe. In addition, it states, less cocaine is consumed per capita than in the past.
InSight Crime Analysis
Although Latin American organized crime has diversified far beyond the drug trade, cocaine trafficking remains the lifeblood of its operations and a shrinking cocaine market could have a devastating impact on revenue streams.
The UNODC's cautious claim that this is the case, however, is unlikely to herald a period of sustained decline for the cocaine trade and the organized crime networks it funds. Production is already again on the rise and the new global marketplace that is emerging holds the potential for huge profits.
The rise in cocaine production has been driven by one country, Colombia. According to the White House Office of National Drug Control Policy, coca cultivation increased by 39.1 percent in 2014, then a further 42.5 percent in 2015. If a shortage of product has been behind the shrinking cocaine market, then this is unlikely to remain the case for long.
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Due to the consumption and trafficking shifts noted by the UNODC, a significant proportion of this cocaine bounty may find its way to new, growing markets such as Australia, China or Israel. These markets may currently be limited by low per capita use but, as the UNODC notes, this is also likely to change as the markets mature and cocaine use becomes more established.
This process will be accelerated if Latin American drug traffickers increase the flow of cocaine to meet and encourage this growing demand, and there are signs this is already happening. The presence of Mexico's Sinaloa Cartel has been reported as far away as Australia, China, Malaysia and the Philippines, while European authorities believe Colombian organized crime networks are using Spain as a base to expand into new European markets.
In addition to these emerging markets, the United States and Europe still represent substantial profits and are likely to continue to do so, as any decline in consumption is also likely to stagnate, and use may even trend upward again after it bottoms out. Last November, the United States' top anti-drug official, William Brownfield, said US cocaine consumption is once again on the rise after years of decline.
Both supply and demand of cocaine are likely to always be in some state of flux as the trade responds to an array of influences that range from public policy to mafia wars, and it may well be true that the market has recently been at a low ebb. However, one thing is constant -- the ability of organized crime networks to adapt to new realities and hunt down new opportunities.