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Afghan Opium Market Plummets, says UNODC

Cultivation, production and prices down

UNODC Executive Director warns of Afghan "narco-cartels"

Kabul, 2 September (UNODC). In its 2009 Afghan Opium Survey (summary findings) released in Kabul today, the United Nations Office on Drugs and Crime (UNODC) reports that "the bottom is starting to fall out of the Afghan opium market". Opium cultivation is down by 22%, production by 10%, and prices are at a ten year low. The number of poppy-free provinces has increased from 18 to 20, and drug seizures continue to rise thanks to more robust counter-narcotics operations by Afghan and NATO forces. "At a time of pessimism about the situation in Afghanistan, these results are a welcome piece of good news and demonstrate that progress is possible", said UNODC Executive Director Antonio Maria Costa.

Opium cultivation has fallen to 123,000 hectares, down from a peak of 193,000 ha in 2007. This year, the most significant decrease comes in Helmand province where cultivation declined by a third, from 103,590 hectares in 2008 to 69,833. The dramatic turn-around in one of Afghanistan's most unstable provinces can be attributed to an effective mix of sticks and carrots: strong leadership by the governor; a more aggressive counter-narcotics offensive; terms of trade more favourable to legal crops; and the successful introduction of food zones to promote licit farming.

Opium production in Afghanistan - down 10% to 6,900 tons - has not fallen as dramatically as cultivation because farmers are extracting more opium per bulb. This year, Afghan poppies yielded 56 kg of opium per hectare, which is a 15% increase over 2008 and five times more than what opium farmers yield in the Golden Triangle of South-east Asia (10 kg/ha).

World demand for opium remains stable (at around 5,000 tons), which is several thousand tons lower than what Afghanistan produces every year. Yet prices are not crashing which suggests that a large amount of opium is being withheld from the market. "Stockpiles of illicit opium now probably exceed 10,000 tons - enough to satisfy two years of world (heroin) addiction, or three years of medical (morphine) prescription", says Mr. Costa. "Where is it, who is hoarding it, and why? Intelligence agencies should defuse the ticking-bomb of opium stock-piles, before these become the source of potential sinister scenarios", warned Mr. Costa.

Over-supply at the source (in Afghanistan) and lower market penetration (in Europe) are pushing opium prices down. Wholesale (farm gate) prices in Afghanistan have fallen by a third in the past year: from $70/kg to $48/kg for fresh opium; from $95/kg to $64/kg for the dry variety. In Afghanistan, opium values have not been this low since the late 1990s, when the Taliban were in power.

This year opium farmers saw their (gross) earnings per hectare shrink by one quarter, to $3,562/ha down from $4,662/ha in 2008. Falling prices and lower cultivation this year caused a 40% collapse in the total farm-gate value of opium production in Afghanistan, for a total of $438 million. This is equivalent to 4% of the country's (licit) GDP, down from 12% in 2007, and an unprecedented 27% in 2002. 800,000 fewer people are involved in opium production, compared to 2008.

Afghan and NATO forces are now compounding the pressure caused by market forces. "The link between drugs and insurgency, now recognized, is being attacked militarily", said Mr. Costa. Until recently, interdiction had been largely ineffective. Although 90% of the world's opium comes from Afghanistan, less than 2% is seized there (more than 20% of global cocaine supply is seized by its main producer, Colombia). Lately, counter-narcotics operations have become more frequent and more robust. In the first half of 2009, military operations destroyed over 90 tons of precursor chemicals, 450t of seeds, 50t of opium, 7t of morphine, 1.5t of heroin, 19t of hashish and 27 labs. "While this has knocked out only a fraction of the Afghan drug economy, it has increased the risks of drug trafficking, and is creating a deterrent for the future", said the head of UNODC.

According to the head of UNODC, "eradication continues to be a failure". Over the past two years, only 10,000 hectares of opium (less than 4% of the amount planted) were eradicated, at an enormous human and economic cost. Mr. Costa called for greater support for farmers. "In post-election Afghanistan, the rural development push must be as robust as the current military offensive - to feed and employ farmers, not just to search and destroy their drugs", he said.

Despite recent progress, Afghan drugs still have catastrophic consequences. They fund criminals, insurgents, and terrorists in Afghanistan and abroad. Collusion with corrupt government officials is undermining public trust, security, and the law. The taint of money-laundering is harming the reputation of banks in the Gulf, and farther afield. Opiate addiction is a big problem in Afghanistan, Iran, Central Asia and Russia.

"A marriage of convenience between insurgents and criminal groups is spawning narco-cartels in Afghanistan linked to the Taliban", warned Mr. Costa. As in other parts of the world, like Colombia and Myanmar, the drug trade in Afghanistan has gone from being a funding source for insurgency to becoming an end in itself. "Drug money is addictive, and is starting to trump ideology", said Mr. Costa.

He repeated his call for drug traffickers connected to terrorism to be reported to the UN Security Council (in line with Resolution 1735). "Drug lords should be brought to justice - not executed in violation of international law or pardoned for political expediency".

The head of UNODC underlined the need for a regional approach to tackle the Afghan opium threat. "The focus on Af/Pak is welcome, but we need to widen the scope to Iran and Central Asia as well", said Mr. Costa. That is why UNODC has brokered a Trilateral Initiative among Afghanistan, Iran and Pakistan to share counter-narcotics intelligence and run joint operations. It has also created a Central Asia Intelligence Centre, headquartered in Almaty, Kazakhstan.

Mr. Costa cautioned that "controlling drugs in Afghanistan will not solve all of the country's problems, but the country's problems can not be solved without controlling drugs". He said "it is too early to tell if the decrease in opium cultivation and production over the past two years is a market correction that could be reversed, or a downward trend". But he underlined the need for increased security in order to achieve further progress. "Like never before, the fates of counter-narcotics and counter-insurgency are inextricably linked", he said.

The head of UNODC urged the Afghan authorities and the international community to stay the course, and scale up targeted economic assistance and counter narcotics. "It would be an historical error to allow this undeniable progress to be undermined not in the opium fields of poor farmers, but in the killing fields of suicide bombers", said Mr. Costa.

Advance copies of the Afghan Opium Survey are available upon request.

The Survey will be posted on the UNODC website at www.unodc.org at 07.30 GMT on 2 September 2009.

In the next few months, UNODC will also be issuing:

- Threat Assessment on the Afghan Opiate Trade

- Afghan Cannabis Survey

- Afghan Drug Use Survey

- Afghan Corruption Survey

 

For further information, please contact:

Walter Kemp Spokesman and Speechwriter, UNODC

Telephone: (+43-1) 26060-5629 Mobile: (+43-699) 1459-5629

Email: walter.kemp@unodc.org

 

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