The Wuhan coronavirus has resulted in many casualties as the world economy has effectively slid into a recession and the black market is no exception. At a time when the supply chains have been disrupted, COVID-19 has severely hampered the operations of the illegal drug trade as infamous and powerful drug cartels scramble to keep their illegal but highly profitable businesses afloat as the precursors and other raw material for the drugs are mostly supplied from China.
Recently, cartels are now shying away from plant-based drugs like heroin and marijuana and are shifting to synthetic drugs that can be produced round the clock and are 50 times more powerful than heroin and also result in a larger profit margin and this is where the problem starts for the cartels.
The drug cartels heavily rely on China for the precursor chemical required to make synthetic drugs like methamphetamine and fentanyl. In fact, one of the main suppliers is located in Wuhan which has been completely shut down, thus delivering a sucker punch to the cartels and their bosses.
The pandemic has seen countries across the globe into some sort of lockdown which has further hampered the illegal drug trade. The 2,000 mile US-Mexico border is one of the most bustling routes for illegal drugs to flow into the USA as the smugglers use the traffic as a cover. The traffic has now trickled down to a bare minimum and with bars and nightclubs out of operation, the cartels are facing a huge demand and supply problem as the prices of the drugs have soared. Cocaine prices are now up by 20 percent or more in cities with demand and Heroin has become interestingly difficult to find in Denver and Chicago. In Los Angeles, methamphetamine is selling at a whopping price of $1,800 per pound.
“They are facing a supply problem and a demand problem. Once you get them to the market, who are you going to sell to?” said Alejandro Hope, a security analyst and former official with the Mexican intelligence agency.
The US Drug Enforcement Administration has already reported a sharp decline in money laundering and drug sales through the dark web. “The godfathers of the cartels are scrambling,” said Phil Jordan, a former director of the El Paso Intelligence Center.
There is a reason why the prices of synthetic drugs like methamphetamine and fentanyl have shot up. For the synthetic drugs, the cartels heavily rely on China for the supply of precursor chemicals to produce the drugs in large quantities and smuggle it into the USA. The imports of the precursor chemicals have virtually stopped due to the pandemic.
“The quarantine of Wuhan and all the chaos there definitely affected the fentanyl trade, particularly between China and Mexico,” said Ben Westhoff, author of “Fentanyl, Inc.”
Westhoff further added, “The main reason China has been the main supplier is the main reason China is the supplier of everything — it does it so cheaply. There was really no cost incentive for the cartels to develop this themselves.”
The Wuhan coronavirus is also changing the shape of many industries and the drug cartels are no exception. The drug cartels are now exploring the feasibility of producing the precursor chemicals in-house despite the fact that Wuhan has now partially eased the lockdown and is slowly re-opening.
“In China, according to the Drug Enforcement Agency (DEA), around 5,000 illegal drug laboratories have been processing synthetic drugs and chemicals to process them. Most of these drugs have Europe and North America as the main markets,” said Johan Obdola, president the Global Organization for Intelligence.
Obdola added that, “Cartels bring synthetic drugs through food exports, fruits, automotive equipment, toys and other products that are allocated in an extensive distribution network across the United States. COVID-19 has generated a huge loss in regarding any illegal drugs, and specifically synthetic drugs, not only to Mexican cartels but to most drug cartels operating worldwide.”
The US government has also stepped up its counter-narcotics operations as recently authorities busted approximately $30 million worth of street drugs. President Trump also stated that US Navy Ships are now moving towards Venezuela following a U.S. drug indictment against Venezuelan dictator Nicolás Maduro.
“Not even the dope dealers can hide from the coronavirus,” said Capt. Chris Sandoval from Harris County Sheriff’s Office.
The cartels are experiencing a shock in demand as the US economy begins to contract. Some experts estimate losses to the tune of 80% of the cartel’s standard revenue over the past two months.
At a time when countries across the world are taking determined steps to shift supply chains out of China, with Japan leading the charge, it seems that even the drug cartels and their godfathers have had enough of China and are looking to become more self-reliant.