Drug trafficking groups in Paraguay can earn almost 20 times more selling marijuana in Chile than on the domestic market, according to Paraguayan authorities, an indication of how price discrepancies between countries can shape the regional drug trade.
Anti-drug investigators in Paraguay recently said the market price for a kilo of marijuana is around $45, however the same amount can be sold in Chile for between $800 and $900, reported Ultima Hora. Paraguayan traffickers pay close to $30,000 to smuggle 400 kilos of marijuana through Argentina to the central Chilean city of Los Andes, where the drug shipment fetches $360,000 on average.
Authorities became aware of the financial details of the cross-border marijuana trade following the dismantling of two drug trafficking networks that sent models to Chile so they could smuggle the cash profits back to Paraguay. One of the drug trafficking rings was reportedly led by a captain in the Paraguayan army. In addition to the $30,000 it cost to smuggle the marijuana to Chile, the models reportedly charged the drug traffickers up to $10,000 for each trip.
In total, Paraguayan drug traffickers earn approximately $320,000 for each 400 kilo shipment of marijuana sold in Chile, according to Ultima Hora.
InSight Crime Analysis
The difference in marijuana prices between Paraguay and Chile is a good example of the push-pull dynamics that determine how South America's regional drug trade is patterned. In September 2014, Paraguay's drug czar Luis Rojas told InSight Crime that Chile's lucrative consumer drug market has made it one of the principal destinations for Paraguayan marijuana, despite the two countries lacking a shared border. In November 2014, authorities in Argentina seized over 8.5 tons of marijuana originating from Paraguay that was bound for Chile, the country's biggest marijuana seizure on record.
SEE ALSO: Coverage of Paraguay
Paraguay is South America's largest producer of marijuana, with traffickers also feeding the markets in Argentina and Brazil, where it can be sold at a significant mark-up. Brazilian criminal groups in eastern Paraguay -- the country's principal marijuana-growing region -- are thought to control a substantial portion of the cross-border drug trade. Widespread official corruption in Paraguay also facilitates the heavy flow of marijuana destined for Brazil.