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 Editorials | Issues | September 2007 
Narcotics Traffic Feeling Squeeze?
 Anna Cearley - San Diego Union-Tribune
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 |  | The Office of National Drug Control Policy said in July that it had tracked a large spike in cocaine prices: They went up at least 67 percent in 12 U.S. cities, including Los Angeles and New York City, over the past six months. |  | |
The price of certain illegal drugs has soared as law enforcement on both sides of the border target traffickers and Mexican drug cartels fight each other for control of the trade.
“You start hearing in the street about things being more expensive and harder to get, and that the stuff they get isn't that good,” said Mike Mendez, a narcotics detective with the San Diego Police Department.
The Office of National Drug Control Policy said in July that it had tracked a large spike in cocaine prices: They went up at least 67 percent in 12 U.S. cities, including Los Angeles and New York City, over the past six months. San Diego wasn't included in that study.
Other U.S. law enforcement officials say methamphetamine prices also have gone up recently in areas such as Los Angeles and San Diego.
Nobody is ready to declare victory in the war on drugs, but some law enforcement officials say the high prices could be an indication that there are serious disruptions in the drug pipeline through Mexico. Experts say that price fluctuations are not unusual in the illegal drug market.
The price increases may be the result of local and international setbacks against traffickers, some experts say. In March, for example, the U.S. Coast Guard seized 20 tons of cocaine from a ship off Panama's Pacific Coast.
Others say further explanations may be just south of San Diego, where drug cartels are battling each other and the Mexican federal government has stepped up its offensive against traffickers such as the Arellano Félix cartel. Mexican authorities also dealt a setback to methamphetamine manufacturers this year in an investigation into the source of precursor chemicals from China that resulted in a huge bust in Mexico City.
The price increases apparently are affecting the more expensive drugs manufactured in or transported through Mexico. Marijuana prices haven't shown a change, presumably because it is available from numerous sources.
Some drug experts say the data should be treated with caution. The Office of National Drug Control Policy announced similar developments with cocaine in 2005, but a drop in prices followed, according to an April study by the Washington Office on Latin America, a think tank.
Others say this year's price increases for cocaine and methamphetamine are especially unusual because they happened so quickly.
“We are seeing a decrease in supplies that's driving the wholesale price,” said Rudy Lovio, a criminal-intelligence specialist with the California Department of Justice's Los Angeles County Regional Criminal Information Clearinghouse.
In three months, Lovio said, bulk quantities of methamphetamine rose to roughly $15,000 a pound from about $12,000 when bought wholesale from distributors. Cocaine – which has been roughly $14,000 a pound for years – went up to as much as $17,000 in the Los Angeles area, he said.
Lovio didn't know why his department's statistics indicate less of an increase than the 67 percent rise noted in the Drug Control Policy study, which included his data as well as that of other reporting law enforcement groups.
San Diego prices
Tracking drug prices isn't a precise science. It can vary according to geography, with prices differing in areas that are as little as 30 miles apart. When law enforcement cracks down on regional distributors, certain supply chains are affected while others are not. This means price increases may not register across the board.
Some cities publish findings less frequently than others. The San Diego Law Enforcement Coordination Center, a multiagency organization that analyzes cases and shares data, released its annual figures in April, when some drug experts say the prices first started rising.
A pound of methamphetamine, which was selling for $5,000 to $10,000 last year, cost as much as $12,500 in April, according to the San Diego center. But investigators with Immigration and Customs Enforcement say not-yet-released reports indicate the price rose even more – to between $14,000 and $16,000 – since July.
Dan Simmons, a spokesman with the San Diego office of the U.S. Drug Enforcement Administration, said his office would need to analyze such figures closely before making a definitive statement.
Simmons said the price of methamphetamine has been rising steadily over the years as tougher regulations make it harder to obtain the material used to manufacture it.
Drug confiscations have been on the rise along California's U.S.-Mexico border since 2003, said Vince Bond, spokesman for U.S. Customs and Border Protection.
But immigration enforcement investigators said they started to notice in recent months that methamphetamine seizures declined significantly across the southwest border, though not in California. Analysts are studying the trend, as well as a similar one with cocaine, said Immigration and Customs Enforcement spokeswoman Lauren Mack. No statistics are being released at this time, Mack said.
Some investigators say methamphetamine production may have plummeted after Mexican authorities confiscated $207 million in the house of Chinese-Mexican businessman Zhenli Ye Gon. U.S. authorities called the March operation in Mexico City the largest seizure of money in the history of drug enforcement.
“It's the first time we've seen a price increase like this for methamphetamine, and it's believed to be related to the fact that the supply has gone down from Mexico,” Mack said.
Mexico's moves
Lovio and others also point to a prolonged campaign by the Mexican government against drug cartels, which finally may be affecting the supply of drugs as it creates upheavals in the drug world.
In the Tijuana region, the Arellano Félix cartel is being challenged by rivals such as suspected traffickers Joaquín Guzmán and Ismael Zambada.
The Arellanos' grip has weakened after a series of arrests and killings of their top members.
A man connected to the drug trade in Tijuana, who declined to have his name published because he is involved in illegal activities, said the chaos has affected the flow of more-profitable drugs through Tijuana. He said the Arellanos are aggressively pursuing people who don't pay them, and some cautious traffickers are curbing their activities while waiting for new drug alliances to consolidate with Arellano rivals.
Luis Javier Algorri Franco, Tijuana's secretary of public security, said various Mexican law enforcement agencies have shared anecdotal observations of some drug price increases.
“But there is no study that says that this is indeed taking place,” he said.
Michael Vigil, a former Drug Enforcement Administration special agent who oversaw the San Diego office, said conflict between cartels can impact the supply chain temporarily. Vigil said he doesn't believe drug groups would hoard drugs intentionally as a way of driving up profits.
“These are obviously profit-making enterprises and if they don't move the merchandise, then they falter like any corporation,” he said.
Jennifer de Vallance, press secretary for the Office of National Drug Control Policy, said factors contributing to the price increases could include greater enforcement in Mexico, more seizures of cocaine from Colombia, a growth in cocaine use in Europe, and violence among Mexican drug groups.
“It's unclear how long the trend will last, so the data must be interpreted with caution,” de Vallance said.
Anna Cearley: (619) 542-4595; anna.cearley@uniontrib.com |
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