The World Heroin Market: Can Supply Be Cut?

By Letizia Paoli; Victoria A. Greenfield et al. | Go to book overview

3
The Contemporary Market

Introduction

This chapter presents an overview of the contemporary world opiate market and supply-control programs. It provides both a static portrait—a “snapshot”—of the market and insight to its dynamics. We consider both sides of the market—supply and demand—because, as is true of all markets, be they for illicit or licit products, one side cannot exist meaningfully without the other.1 As a practical matter, there would be no opiate production and trafficking without consumption, and no opiate consumption without production and trafficking. Moreover, actual patterns of production, trafficking, and consumption ultimately depend on interactions between the two sides. If, for example, the costs of production and trafficking increase, the simultaneous and sequential responses of producers, traffickers, and consumers to the changes in costs will determine the new levels of production, trafficking, and consumption, and the prices of opiates along the supply chain. Only by considering both sides of the market can we fully assess the potential effects of efforts to reduce the world supply of opiates.

One feature of notable interest in this market is the relative concentration of global supply vis-à-vis demand. Only a small number of countries produces opiates or engages in transshipment whereas many countries, particularly in Asia, but also in North America, Europe, and Oceania, which includes Australia and New Zealand, report large numbers of consumers.

Another noteworthy feature is the market’s apparent segmentation. Producers in one specific country or region serve consumers in another via a small

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