3 Jan 2011

Opium prices rising

6:07 am on 3 January 2011

Opium prices have almost doubled after production in Afghanistan last year was halved by blight.

Government officials fear more farmers will turn to the crop in the absence of profitable alternatives.

Opium crops were cut by an estimated 48% in 2010 by blight.

Farm-gate prices at times reached $US169 or more per kg of dry opium in 2010 compared with $US64 per kg in 2009.

Output for 2010 is estimated at around 3900 tonnes, the lowest since 2003, compared with 6900 tonnes in 2009.

Even so, opium last year accounted for 5% of gross domestic product, up from 4% in 2009.

Afghanistan is the producer of about 90% of the world's opium. Most of it is exported and helps fund the Taliban. According to the United Nations, the Taliban derives $US100 - $US400 million per year in levies on drug production and trafficking.