Ice ice baby: record seizure won’t freeze crystal meth market

Australian Federal Police posing with a large bag of ice seized as part of a record haul. But will this make any difference to the market for crystal methamphetamine? AAP/Australian Federal Police

Yesterday’s record 585 kg crystal methamphetamine seizure made headlines, but then so do many others. Was this one big enough to deserve special attention? And what effect does a seizure like this have on a narcotics market anyway?

How much was it worth?

When seizures are reported, it can be difficult to put the figures in perspective. The street value (in this case said to be up to $438 million) often gets a lot of attention. But street value calculations can be flawed. Setting aside cynicism about incentives for law enforcement to overstate the value (so that headlines look good), the real market price of drugs can be difficult to identify (even with the use of innovative crowd-sourcing tools).

This is particularly true when prices are volatile - as they are in the ice market. An Australian Crime Commission (ACC) report indicates that in the year from 2009-2010 to 2010-11 ice became more expensive in New South Wales and Queensland, while in the ACT and Victoria prices were estimated to have fallen by up to two thirds.

In addition to volatility over time, there is substantial variation between parts of the country. Figures from the National Illicit Drug Reporting Scheme suggest that in 2011 a point (100 milligrams) of crystal meth varied in price from $50 in Tasmania to $150 in the Northern Territory. This difference between the highest and lowest prices is around four times bigger for ice than it is for cocaine in Australia (based on UNODC estimates).

The total street value of the ice seized yesterday can, therefore, vary widely depending on where it was headed. But whether or not this load of ice is worth $438 million, how much ice is 585 kilograms, anyway?

Is 585 kilograms a lot?

In short, yes. Authorities noted that it was the largest-ever seizure of ice, but the other way to put this in perspective is to note that this 585 kilograms is in the ball park of the total of all seizures for all the year 2009-10 as recorded by the ACC, which was around 670 kilograms.

Whichever way you cut it, 585 kilograms is a lot of ice. AAP: Australian Federal Police

Alternatively, consider some (very) rough, back-of-the-envelope calculations: the UNODC estimated that in 2012, 2.1% of Australians aged 15-64 used amphetamines. Even if we assume that 2% are using ice in particular (there are other forms of amphetamine), given current ABS estimates of the Australian population of around 23 million, this would mean we have around 460,000 ice users in the country.

Recent estimates (published by the Australian Institute of Criminology) suggest that ice doses taken by users range from 20 to 40 milligrams. At those estimates, 585 kilograms of ice would provide between around 14.6 and 29.3 million doses, or approximately 30 to 60 doses for every user in the country. Even though these quick calculations yield rubbery figures, whichever way you cut it, that’s a lot of ice.

Effect on the market

So how hard will this hit the ice market? It’s difficult to say, not least because it’s difficult to estimate the total volume of ice in the market. One thing that’s worth bearing in mind that this wasn’t a package from Amazon that was headed to the receiver the very next day. The illicit nature of drug markets make just-in-time management difficult, even when the drug is in high demand - stock will often be distributed through networks to smaller dealers to be doled out over a period of time. So it’s not necessarily the case that users will be going without overnight.

The supply side of the market has been quite strong in recent years. For example, the Australian Institute of Criminology’s surveys of police detainees found that from 2009-11, 41% of respondents found ice was getting easier to obtain (only 19% said it was getting harder), and 51% thought there were more sellers around (with only 12% saying there were fewer sellers). In an increasingly entrenched market, with competing supply lines, even big seizures may have only short-term effects.

The regionalised and local nature of ice production also makes supply relatively responsive. The drug is produced in locations quite close by in Asia, with some produced locally. Seizures of ice, then, are likely to have less substantial effects on the market than seizures of a drug like cocaine, which is part of a closely integrated, globalised market with one primary point of production.

Waiting for a fix

Although the ice market is likely to fill any gap left by a seizure like this pretty quickly, one thing is for sure - even short-term shortages or price spikes can cause problems for users. Withdrawal symptoms can include paranoia, irritability, nightmares, anxiety and panic. Wherever that shipment was headed, it’s absence may well make for some troubled users in the coming weeks.