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How the global COVID19 lockdown is hurting Mexico’s drug cartels’ business

PortandTerminal.com, April 5, 2020

MEXICO CITY – You think COVID19 is bad for your business? Pity the poor Mexican drug cartels. The global coronavirus lockdown is making it hard for even them to operate.

Let’s look at the situation on the ground in Mexico and how it is affecting the cartels.

Coronavirus outbreak in Mexico

Mexico has a population of 129 million people and 1,890 confirmed infections of COVID19 and 79 deaths. If that sounds low to you then you’re right. It is. By way of comparison, Finland, a wealthy Nordic country with a population of just 5.5 million has slightly more cases than Mexico’s official tally. Heck, even Wisconsin (population 5.8 million) has more confirmed cases of the virus than Mexico (2,128 vs 1,890).

Mexico has simply not tested enough people yet to know the true level of infections in the country. Hugo Lopez-Gatell, the government’s coronavirus spokesman, said only about 14,000 tests have been carried out nationwide since the start of the pandemic. 

Nevertheless, the Mexican government declared a health emergency and ordered the suspension of all non-essential activities. Also, the US/Mexican border is shut to all but essential commercial traffic.

First days of the lockdown in Mexico City (March 16):

Drug manufacturing and smuggling

Map showing the flow of chemicals from China into Mexico and the United States
IMAGE: Chinese Meth Precursors and fentanyl flow to the Western Hemisphere through Mexico where they are processed and then smuggled into the United States

The lockdown in Mexico has dried up the supply of imported Chinese chemicals needed to produce synthetic drugs. Prior to the virus outbreak, for example, China’s Hubei province was a major exporter of fentanyl. But now, Mexico’s big Sinaloa and Jalisco Nueva Generacion (CJNG) drug cartels are lacking the raw materials to produce drugs, as insightcrime.org reports.

The difficulty in producing drugs has increased their price. According to Mexican weekly Riodoce, Sinaloa boss Ismael “El Mayo” Zambada has hiked the market price for synthetic drugs. It reports that the price for 1 pound of methamphetamine has increased from 2,500 pesos (€95/$102) to 15,000 pesos.

And even if the cartels can get their hands on the drugs, getting them into the United States is much more difficult. With the US/Mexico border all but shut, many cartel deliveries have had to be suspended, costing them millions in lost revenue.

READ: U.S.-Mexico border closure announced by President Trump. Cargo exempt.

“Five days ago was the last time we brought something across the border. Just three kilos,” said a smuggler from Mexicali, speaking to blogdelnarco, a platform covering Mexican organized crime. “We have arrangements with border police and our smugglers know which borders posts to use. But now, many crossing have surprisingly been shut. That makes our business much more risky.”

Protection Rackets

Tepito Market is the place locals go to purchase for brand-name clothing, flat-screen televisions, toys, glasses, drones, mobiles and so on at rock-bottom prices.
PHOTO: Tepito Market is the place locals go to purchase for brand-name clothing, flat-screen televisions, toys, glasses, drones, mobiles and so on at rock-bottom prices.

Another way that the cartels make money in Mexico is through protection rackets. Germany’s news publication Deutsche Welle (DW) describes a market in Mexico City called Tepito Market which is controlled by a gang Union Tepito.

Tepito Market is the place locals go to purchase for brand-name clothing, flat-screen televisions, toys, glasses, drones, mobiles and so on at rock-bottom prices.

The mom and pop vendors who want to sell their products at Tepito must pay protection money to Union Tepito. Each week, the mobsters rake in hundreds of thousands of pesos though this racket.

The problem is that the supply of Chinese products started drying up two months ago due to the coronavirus lockdown. “Because our middlemen have suspended flights to China, we’re short on goods and making up for that with Mexican and US products” said one vendor.

Making matters even difficult is the lockdown. People simply don’t go out shopping to markets like they used to. As a result, sales for the vendors are down by at least 50%.

The Union Tepito gang is though is still demanding vendors pay protection money and has started abducting and even killing some of those refusing to comply. Mexican media have reported that some vendors are now calling on the municipality to dispatch the national guard to guarantee their safety. 

Violence

Crime scene of beheaded rivals From Los Zetas And Sinaloa Cartel
PHOTO: On March 26 Jalisco New Generation Cartel And Gulf Cartel United, beheaded rivals From Los Zetas And Sinaloa Cartel and posted pictures and video of them doing it for all of Mexico to see

One thing that is never in short supply in Mexico is violence. Social distancing measures and calls for Mexicans to stay home have not led to a decrease in violent crime.

Since the first case of coronavirus was detected in Mexico on February 28, more than 2,000 people have been killed. According to Elblogdelnarco, for every Covid19 patient who has died, 178 homicides have been recorded.

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