According to estimates from Bloomberg Economics, cocaine is poised to become Colombia's top export, ahead of oil, as drug output continues to rise and the government adopts a more lenient drug policy.
According to Bloomberg economist Felipe Hernandez, oil exports dropped 30% in the first half of the year and cocaine trade is on a steady upward trend, meaning cocaine could become Colombia's top export as soon as possible. this year.
“We estimate revenues from cocaine exports to increase to $18.2 billion in 2022, just behind oil exports of $19.1 billion last year,” Hernandez said in a note.
“The government is destroying the laboratories where coca leaves are turned into cocaine, but this does not prevent the expansion of production.”
Colombia's cocaine output hit a record 1,738 tons last year, while the area of land planted with coca, the raw material used to make the drug, increased 13% to a record 230,000 hectares (570,000 acres) in 2022 from with previous. year. according to a report from the United Nations Office on Drugs and Crime released this week.
Read More: El Chapo's wife was released from US prison
Hernández said the increase in cocaine production had a short-term impact on activity, domestic demand and external accounts, but did not appear to be correlated with the performance of the Colombian peso. President Gustavo Petro, Colombia's first leftist leader, has changed the country's approach to drug trafficking, seeking to go after drug lords who profit more from selling drugs abroad. instead targeting coca leaf producers, who constitute the weakest link in production. chain. Petro seeks to negotiate with the country's major drug trafficking groups, hoping to end six decades of civil conflict through peace agreements.
The new drug policy approach is helping illegal groups increase cocaine production, Hernandez said.
Bloomberg Economics calculates export volumes as the difference between production and seizures, meaning the figure is likely lower as this calculation does not take into account domestic consumption and seizures in transit countries and destination, and estimate export prices by adjusting the methodology's average wholesale price. 2015-2018 prices and export prices with costs, insurance, and freight calculated by Andres Arias ((2019).
Bloomberg Economics is a subsidiary of Bloomberg LP that provides macroeconomic research services to Bloomberg subscribers and is separate from the newsroom.