Wholesale cocaine prices have jumped to their highest levels since the mid-1980s while purity of street cocaine has dropped sharply, signs that law enforcement efforts finally may be starting to disrupt the flow of cocaine into the United States, according to a Drug Enforcement Administration analysis released yesterday.
A nationwide survey of DEA field offices, completed in late June, indicated a current "shortage" of wholesale cocaine in major distribution cities such as Los Angeles, New York and Houston. In those cities, undercover DEA agents paid as much as $35,000 for a kilogram of cocaine in late June, more than 50 percent more than last year.
The cocaine's purity has declined drastically, from about 70 percent pure two years ago to 55 percent today, the analysis said. The trend is starting to appear "pretty much all over the country" and reflects "the first positive development in domestic cocaine . . . availability and prices since the onset of the cocaine epidemic," Ronald Caffrey, DEA deputy assistant administrator for operations, told the Senate Judiciary Committee yesterday.
But it was unclear how far down the distribution chain the trend has reached. In the Washington area, wholesale cocaine prices have climbed in recent months to as high as $40,000 a kilogram, nearly double the rate last year, said Peter Gruden, agent in charge of the DEA's Washington field office.
But street-level prices have not risen. "We haven't seen any change," said police department spokesman Wendell Samuels.
In Los Angeles, wholesale cocaine purchases by city police undercover officers have jumped about 66 percent in price to $30,000 a kilogram in the past six weeks alone, said spokesman Bill Booth. Street dealers are selling smaller pieces of rock cocaine, "cutting" or diluting their cocaine powder with talcum powder and other substances, and pushing marijuana and methamphetamines much more aggressively, he said. "This is dramatic," Booth said.
Caffrey cautioned that some of these changes reflect deliberate cocaine stockpiling by Colombian and Mexican traffickers trying to drive up prices and increase their profits. In addition, he said, wholesalers may be cashing in on street-level fears of a shortage.
"We have not deluded ourselves into thinking that the cocaine threat has subsided," Caffrey said.
Senate Judiciary Committee Chairman Joseph R. Biden Jr. (D-Del.) noted that the higher cocaine prices are still only about half the 1980 levels. "We've made some progress, but in my view, we still have a long, long, long way to go," he said.
Nevertheless, the new DEA analysis is the latest in a number of indications that the surge in cocaine abuse that began in the early 1980s has started to abate. Recent federal surveys have shown declines in the total number of cocaine users, while cocaine-related hospital emergency room admissions dropped 22 percent in the last three months of 1989.
Officials acknowledge they have no clear theory to explain why this is happening. Caffrey suggested that intensified enforcement actions in Latin America, which began last August with a crackdown in Colombia, had disrupted operations and purchase arrangements of the major drug cartels, causing a sudden glut of coca leaves in the hands of Peruvian and Bolivian farmers and a resulting sharp drop in their prices.
Coca leaves are the raw material used to make cocaine. But Caffrey also noted no evidence of shortages in Colombia of the finished product, cocaine powder. On the contrary, powder prices there have declined slightly, he said.
He cited growing evidence that Colombian traffickers are moving production facilities into other countries and starting to shift their transit routes into Guatemala and Costa Rica in response to stepped-up interdiction efforts in Mexico.
"This is a chess game," Caffrey said.