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Fears high prices will push Afghans back to opium trade

Source: Thomson Reuters Foundation - Sun, 2 Jan 2011 12:29 GMT
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(c) Copyright Thomson Reuters 2011. Click For Restrictions. http://about.reuters.com/fulllegal.asp
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Jan 2 (Reuters) - By Hamid Shalizi

KABUL, Jan 2 (Reuters) - Opium prices have almost doubled after a blight halved production in 2010, Afghan officials said on Sunday, raising fears more farmers would turn to the illicit crop in the absence of profitable alternatives.

Deputy Counter-Narcotics Minister Mohammad Ibrahim Azhar said the opium crop, which helps fuel the insurgency, had been cut by 48 percent in 2010 by a still unidentified blight.

Big jumps in prices already meant farmers were earning far more for their crops than in 2009. Azhar said the price for opium, a thick paste from poppy plants processed into heroin, had risen 190 percent by the end of December 2010.

Afghanistan has long been the producer of about 90 percent of the world&${esc.hash}39;s opium. Most of it is exported in a thriving world trade estimated at ${esc.dollar}65 billion a year, although the number of addicts in Afghanistan is also rising.

The Taliban in Afghanistan derive ${esc.dollar}100-400 million dollars a year in revenues levied from drug production and trafficking, according to United Nations data, fuelling the insurgency and threatening instability across South and Central Asia and into Russia.

Rising demand, and prices, without sufficient support from outside donors to provide alternatives will leave farmers few choices but to sow poppy fields again, Azhar said after delivering departmental findings for December 2010.

"Our report from the month of December shows that opium prices has jumped up to 190 percent, which has further increased our concern and fear," Azhar told a new conference in Kabul.

"Lack of assistance from the international community will worsen the situation," he said.

Afghanistan&${esc.hash}39;s government and its Western backers have struggled to come up with viable alternatives, ranging from destroying poppy fields to promoting wheat and other crops, since the Taliban were ousted in late 2001.

Azhar said destroying poppy fields would never work unless the 1.7 million farrmers who grow opium, mostly in the Taliban heartland in the south and east, were offered alternatives.

According to the United Nations Office on Drugs and Crime (UNODC) report in September, farmers were estimated to have generated ${esc.dollar}604 million in income from opium in 2010, up 38 percent compared with 2009.

In 2009, wheat prices rose and poppy prices fell, giving farmers a reason to reconsider their planting plans for fields harvested in 2009. In 2010, the reverse was true, with farm-gate opium prices at times reaching ${esc.dollar}169 per kg of dry opium and higher in 2010 compared with ${esc.dollar}64 per kg in 2009.

Output for 2010 has been estimated at around 3,900 tonnes, the lowest since 2003, compared with 6,900 tonnes in 2009. Even so, opium production last year accounted for 5 percent of gross domestic product, up from 4 percent in 2009.

Aside from leading the world in opium production, Afghanistan has become the biggest producer of hashish, or cannabis resin, turning out between 1,500 and 3,500 tonnes a year.

Foreign enforcement agencies are increasingly seeking ways to curb the opium trade as part of the wider battle against Taliban-led insurgents, who use profits from the trade to battle about 150,000 foreign troops in Afghanistan.

Military and civilian casualties are at record levels, with 711 foreign troops killed in 2010, by far the bloodiest year of the war.

(Editing by Paul Tait, editing by Jonathan Thatcher)

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