The Huallaga Valley in central Peru was for many years the country's primary production and export point for cocaine. But as IDL-Reporteros reports, the drug trade has seen radical changes in recent years, and is now primarily controlled by local families rather than foreign trafficking cells.
As part of its eight-part series on drug trafficking in Peru, IDL-Reporteros examines the drug trade in the Huallaga Valley, a remote forested region where, in the early 1990s, there were some 61,200 hectares of coca crops, according to United Nations estimates. That is the equivalent to the total amount of coca now thought to be cultivated in the entire country.
Not only is Huallaga home to a faction of the Shining Path, but it remains an epicenter of Peru's cocaine trade, much of it now controlled by local clans. Below is InSight Crime's translation of extracts from IDL-Reporteros' series on Huallaga:
Drug trafficking in Upper Huallaga has changed, and changed a lot.
The area [under coca cultivation] is nearly the same as in 2000: 13,025 hectares, according to the United Nations.
The drug trade is no longer controlled by large local firms, but by family clans, who are fundamentally storers and producers of cocaine hydrochloride. The Colombians no longer have control of the zone.
Huallaga has 13,025 hectares of coca, which represents 21.3 percent of the the national total, according to the recent coca monitoring report by the United Nations Office on Drugs and Crime (UNODC).
The UNODC says that in 2009, 375 kilograms of dried leaf were needed to produce a kilo of cocaine hydrochloride, and that the national production average of coca leaf per hectare is 2.2 metric tons. The Drug Enforcement Administration (DEA) keeps different statistics, on this as on other issues.
You could say that one of the qualities of the coca leaf in the Huallaga is its high output. The “cookers” can use a smaller amount of leaf to produce a kilo of cocaine hydrochloride.
The reason? The concentration of cocaine alkaloid is higher than in other coca producing regions.
The Drug Trafficking Clans of the Huallaga
How does drug trafficking operate today in the legendary Huallaga Valley?
In a very different form than during the boom cocaine years of the 1980s and the early 1990s. [...]
Similarly to the VRAE [Peru's current biggest coca-producing region], the majority of [the 16 medium-sized to large drug trafficking organizations in the Huallaga] are family clans whose highest production levels are concentrated in Monzon and Aucayacu.
Each clan processes between 200 to 500 kilos of cocaine per month. In the zone, the price of a kilo of washed paste is between $600 and $800, while cocaine hydrochloride varies from $950 to $1,100.
How much money do the Huallaga family clans receive? Let’s suppose that each of the 16 clans sells at the highest average (that is, each clan would sell 500 kilos of cocaine per month). And that’s disregarding some of the smaller vendors that carry out marginal transactions, as well as the possibility that there are clans that have not yet been detected.
With that calculation, in a single year the principle clans of Huallaga would have exported a total of 96,000 kilos of cocaine. If all of those drugs were sold at the price for cocaine hydrochloride ($1,000 Huallaga price), the Huallaga drug traffickers would have received $96 million per year. Each clan on average would have an income of $6 million a year.
It’s nothing to sneeze at, but it is frankly peanuts compared to what the Mexican drug trafficking organizations earn, according to the most conservative estimates of the Rand Corporation. They receive $6.6 billion a year, and Joaquin “Chapo” Guzman alone has an income of about $3 billion dollars.
Similarly to the VRAE-based groups, today the Huallaga family clans act like small and medium businesses. They are not integrated vertically with international networks, like their notorious and lethally colorful predecessors of the 1980s -- and they deal with much less money -- but they are more astute, cautious, and, in general, less violent.
They are also more compartmentalized, try to have legal companies, and are more reliant on outsourcing.
Moving Cocaine Out of Huallaga
Today, aircraft are increasingly returning to reopen a land-air route: from the Huallaga or the VRAE to Palcazu by land, and from there by air to Brazil or Bolivia.
A high percentage of the washed coca paste and cocaine hydrochloride produced by local organizations and family clans in Huallaga, who have expanded their operations to this zone, is exported in aircrafts of Bolivian or Brazilian origin.
With that, Palcazu has turned into a strategic jungle center of production and, above all, distribution and export of cocaine.
“There’s an authorized aerodrome, but it doesn’t do any flight control. Additionally, there are three clandestine air strips ... It’s an open door to Brazil and Bolivia. There is no timely intelligence,” a knowledgeable source told IDL-R. Other sources confirmed this statement.
“They’ve identified that one of the clandestine air strips is in a livestock zone. The flights are made from the location of Siria, in Palcazu. It’s a virgin zone of high traffic,” a local source told IDL-R.
In contrast to the years when there was interdiction of aircraft, today the Peruvian Air Force doesn’t effectively control the air space. “The Air Force doesn’t have radars [in the zone]. The watch points on the borders are unprotected, abandoned,” the same source said.
This has proved advantageous for the local organizations, as every trip made by a single-engine aircraft (the Cessna 210 and 206 are the predominant ones and the most adequate for primitive landing strips in the jungle ... although there have been some reports of flights by Piper Seneca, a twin-engine light aircraft, from Brazil) can transport up to 450 kilos of drugs. [...]
If a kilo of cocaine hydrochloride in Palcazu is worth on average $1,000, each aircraft that leaves the valley transports $450,000 dollars worth of cargo.
If the calculation was made with washed coca paste, which on average is worth $800 per kilo, the value of each cargo would be $360,000.
An aircraft’s journey towards Palcazu lasts an hour and a half from Brazil, and two and a half hours on average from Bolivia.
The flights are on the increase. Some time ago it was estimated that “an average of one flight every 10 days landed on clandestine airstrips. There have been cases in which flights have left every three days,” a local source told IDL-Reporteros. Now, according to recent data, there have been days in which there are “up to three flights a day."
Due to the increase in drug trafficking, it is difficult to know the quantity of drugs exported from the valley. But if the most conservative information is used, based on reports from recent months; and if the calculation is based only on aircraft taking off from four landing strips with each one registering one flight per week, this year the drug trafficking organizations have exported 86,400 kilos of cocaine hydrochloride from Palcazu. This means sales of up to $86.4 million.
The zone’s emergence as a production and exportation point for cocaine was made possible, according to a police source with knowledge of the issue, because it is “almost an uncontrolled zone ... there are basically no operations done there.” The flights enter and leave easily not only because of the proximity of the frontiers, but because, according to the source, “the [anti-drug] helicopters are so focused on supporting eradication that they have abandoned other areas.”
Other sources told IDL-Reporteros that there are at least eight organizations identified in Palcazu. Some of them are directed by “Muelas,” “El Gato,” “the Ayacuchanos,” “Diana,” “Grejo” or “Alex,” “Henry” and “Acha.”
Drugs from Palcazu are not only transported by air, but also leave, on a lesser scale, by land and sea routes.
Asides from the Palcazu route, the cocaine produced in the Huallaga also leaves by land, carried by backpackers or “cargachos,” and mules to cross the mountain paths, and in trucks with double cabins, vehicles and heavy cargo trucks for the sections of highway.
A large percentage of the Huallaga drugs are destined for Peru’s northern coast. There it is hidden in boats or containers to travel by sea to the principal international markets, including Europe and Africa.
Translated with permission from IDL-Reporteros. For original articles in Spanish see parts Five, Six, and Seven of IDL-Reporteros' series, "The Cocaine Clans."