CDS RAASZYUW RUEKDIA6671 1911832-RHAKAAA RHCDAAA RHCKOED RHCPBBB RHCPROC RHDJAAA RHDJHAR RHDJOSI RHDLCNE RHEAMFA RHEFADA RHEFADF RHEFADI RHEFAFM RHEFJWC RHEFMSC RHEFNGA RHEHWSR RHEPAAB RHFJONE RHFJPSP RHFJUSC RHFPAAA RHFQAAA RHHJJAA RHHJJPI RHHJOBU RHHJRAP RHHMDBA RHHMHAA RHHMUNS RHMCSUU RHRMAB RHRMABN RHWRAAA RHWWAAA RUACAAA RUACMXI RUAGKFC RUAGMIA RUAHOSI RUAHOSS RUALARJ RUALINT RUALSFJ RUANJFC RUATCPC RUATDBA RUCBAIC RUCBKMC RUCBLFB RUCBTEC RUCEAAB RUCEAAM RUCEGWA RUCFAAA RUCJNAV RUCKDDA RUCKFCO RUCKMEA RUCKMEG RUCKMEH RUCKNMV RUCKSAC RUCNDT RUCNFB RUCNSE RUCOBBB RUCOGAD RUCOGDA RUCOMAD RUCOPKB RUCOPKC RUCOPLB RUCOSSA RUCOZBG RUCPDC RUCQVAB RUCUBOA RUCUDES RUCUELA RUCUSIN RUCUWHA RUCVAAA RUCXGRD RUCXQAN RUDHAAA RUDHAAD RUDJABF RUEAADN RUEAAMC RUEAAOA RUEACMC RUEACNA RUEACQC RUEADLA RUEADUG RUEADWD RUEAFDC RUEAFDI RUEAFIF RUEAHQA RUEAIIA RUEAIJU RUEAJAA RUEALGX RUEAMDW RUEAMTC RUEACBA RUEANBJ RUEANBV RUEANEC RUEANHA RUEANKE RUEANQA RUEANQS RUEANTX RUEANUT RUEASCO RUEASPC RUEASRT RUEASWA RUEATRS RUEAWJK RUEHAB RUEHAC RUEHAD RUEHAH RUEHAK RUEHAM RUEHAS RUEHBJ RUEHBK RUEHBM RUEHBO RUEHBR RUEHBS RUEHBU RUEHBY RUEHC RUEHCP RUEHCV RUEHDG RUEHDK RUEHDL RUEHDM RUEHEG RUEHFR RUEHGO RUEHGP RUEHGT RUEHGV RUEHHE RUEHHK RUEHIL RUEHJA RUEHKA RUEHKG RUEHKI RUEHBL RUEHKO RUEHKT RUEHBU RUEHKV RUEHLB RUEHLGB RUEHLI RUEHLJ RUEHLM RUEHLO RUEHLP RUEHMD RUEHME RUEHMK RUEHML RUEHMO RUEHMS RUEHMU RUEHCC RUEHNE RUEHNJ RUEHNK RUEHNO RUEHNT RUEHNY RUEHOS RUEHOT RUEBPE RUEHPG RUEHPO RUEHPU RUEHQT RUEHRB RUEHRH RUEHBI RUEHRO RUEHSA RUEHSB RUEHSF RUEHSG RUEHSI RUEHSK RUEHSM RUEHSN RUEHSV RUEHSW RUEHTA RUEHTC RUEHTG RUEHTH RUEHTO RUEHTU RUEHTV RUEHUL RUEHUNV RUEHUP RUEHVEN RUEHVI RUEHVN RUEHWD RUEHWL RUEHWN RUEHWR RUEHYD RUEHYN RUEKDIA RUEKJCS RUENAAA RUENMED RUEOBBA RUEOBMA RUEOEEA RUEOEEE RUEOEGA RUEOFLP RUEOGEA RUEOLAA RUEOLIA RUEOLIX RUEOPGA RUEORYD RUEORYK RUEORYN RUEORYW RUEOSLA RUEPMAX RUEPMTA RUEPPOG RUEPSOC RUEPVAA RUEPVAI RUEPVAP RUEPVAV RUEPVAX RUEPWDC RUERAFC RUERAA RUERBEN RUERBFA RUERCHI RUEREHA RUERGAE RUERGIA RUERHNA RUERHNB RUERHWA RUERICK RUERJFH RUERKOA RUERLWA RUERMMA RUERMOC RUERHNA RUERNOK RUERNUB RUERNUL RUERSHA RUERSHU RUERSWA RUERTAM RUERUCA RUERWSL RUERWSM RUETADA RUETAAA RUETIAE RUETIAK RUETIAS RUETIDD RUETIAD RUFDCOM RUFDGRU RUFDKAS RUFDNEA RUFGAID RUFGSHE RUFMSRJ RUFNPKO RUFNPKR RUFOADA RUFPAHQ RUFPALA RUFPOSS RUFRQJQ RUFTAKA RUFTAKC RUFTAKK RUFTFOA RUFTMDA RUFTRWA RUFTURA RUFTVFA RUHBABA RUHDKAN RUHEHIC RUHHAEA page 26 RUHHBIA RUHHBIZ RUHHFMA RUHHFWA RUHHHGA RUHPQUA RUHUBEA RUHUBMA RUHUDMC RUHUILL RUHUPHO RUHUTRA RUHUTRM RUKAACE RUKABAD RUKACSP RUKAESE RUKAINT RUKAWOR RUKTAAF RULSABU RULSACW RULSDMK RULSJGA RULSNDI RULSSEA RULYVBA RUMICEA RUMIRGF RUMIROB RUQNAAA RUQNIZM RUQVAFO RUQVDPR RUQVOES RUSTCCT RUSTSDC RUVACEA RUVHBEA RUVKA AA RUVOARA RUVRBZA RUWCAAA RUWDEAA RUWDHFG RUWDTBY RUWDXGO RUWFADO RUWFAFK RUWFEAA RUWGTCG RUWHTXG RUWIBOB RUWIBOB RUWICBC RUWICBE RUWSMXI RUYNAAC RUYNTAR ZNY S 5431DTG 101805Z JUL 01 FROM FM DIA WASHINGTON D CONTROLS PASS I 1 1 CLASSIFICATION FOR THIS MESSAGE IS - _ _ _ _ SERIAL MILITARY INTELLIGENCE DIGEST MID 131-2A BODY WORLDWIDE MAJOR DROP IN OPIUM PRODUCTION DOI 9 JUL 01 f AS OF 1200EST TEXT 1 t@ -THE TALIBAN'S BAN ON POPPY CULTIVATION IN AFGHANISTAN WILL REDUCE WORLDWIDE OPIUM PRODUCTION BY AT LEAST 50 PERCENT EXTENDING THE BAN BEYOND 2001 WILL CAUSE REGIONAL OPIUM AND HEROIN SHORTAGES AND SUBSEQUENT HIGHER PRICES IN EUROPE AND RUSSIA SOUTHWEST ASIA'S KEY CONSUMERS THIS STEEP DECLINE IN OPIUM SUPPLIES HOWEVER WILL HAVE LITTLE IMPACT ON THE UNITED STATES IN THE NEXT FEW MONTHS BECAUSE ITS MAIN HEROIN SOURCES ARE IN LATIN AMERICA AND SOUTHEAST ASIA page 27 2 'M POPPY BAN EFFECTIVE LAST JULY THE TALIBAN PROHIBITED OPIUM POPPY CULTIVATION IN AFGHANISTAN THE BAN WAS THE GROUP'S FIRST MAJOR EFFORT TO CURB OPIUM PRODUCTION WHICH APPROACHING 3 700 METRIC TONS IN 2000 ACCOUNTED FOR MORE THAN 70 PERCENT OF ILLICIT OPIUM PRODUCED WORLDWIDE ALTHOUGH POPPY CULTIVATION PERSISTED IN AFGHAN AREAS BEYOND THE TALIBAN'S REACH TALIBAN-CONTROLLED REGIONS MADE UP MORE THAN 90 PERCENT OF AFGHAN OPIUM PRODUCTION LAST YEAR OFFICIALS WHO SURVEYED KEY GROWING AREAS THIS YEAR REPORTED VIRTUALLY NO POPPY CULTIVATION IN AREAS THEY INSPECTED THE OVERALL EFFECT OF THE TALIBAN POPPY BAN ON 2001 OPIUM PRODUCTION WILL BE CLEARER LATER THIS b 1 1 4 c 1 4 g 3 G BUT NARCOTICS STILL FLOW AFGHAN OPIUM AND HEROIN STOCKPILES PROBABLY WILL TEMPORARILY EASE SHORTAGES FROM A REDUCED OPIUM HARVEST HIGH LEVELS OF NARCOTICS SEIZED IN MAJOR TRANSIT REGIONS SUCH AS BULGARIA CENTRAL ASIA IRAN AND TURKEY SUGGEST THE POPPY BAN HAS NOT YET SUBSTANTIALLY REDUCED THE FLOW OF SOUTHWEST ASIAN NARCOTICS TO CONSUMER MARKETS HOWEVER AFGHAN PRICES FOR OPIUM MORPHINE BASE AND HEROIN - AT RECORD LOWS LAST YEAR - REPORTEDLY HAVE QUADRUPLED SINCE THE RESTRICTION 4 FACTORS INFLUENCING TALIBAN ON MAINTAINING THE BAN THE TALIBAN STILL BENEFITS FROM SUBSTANTIAL DRUG REVENUES CHIEFLY FROM ITS TAXES ON CONTINUING NARCOTICS TRAFFICKING AND FROM TALIBAN-OWNED NARCOTICS STOCKPILES WHOSE VALUE HAS INCREASED SUBSTANTIALLY FROM THIS POSITION THE GROUP CAN WAIT UNTIL NOVEMBER WHEN THE NEXT GROWING SEASON BEGINS TO DECIDE WHETHER TO EXTEND THE POPPY BAN THE DECISION WILL BE BASED ON SEVERAL FACTORS INCLUDING THE DEGREE OF INTERNATIONAL RECOGNITION AND ASSISTANCE RECEIVED THUS FAR AS A RESULT OF THE PROHIBITION THE TALIBAN ALSO WILL ASSESS AFGHAN POPPY FARMERS' AND MAJOR NARCOTICS TRAFFICKERS' REACTIONS TO A POSSIBLE EXTENSION OF THE BAN THE SIZE OF EXISTING NARCOTICS STOCKPILES AND THE IMPACT OF CONTINUED PROHIBITION ON ITS OWN FINANCES 5 -Wr IMPACT IF RESTRICTION PERSISTS THE MID-TERM EFFECT SHOULD THE TALIBAN EXTEND THE POPPY BAN WOULD DEPEND ON THE SIZE OF ITS NARCOTICS STOCKPILE ESTIMATES OF AFGHAN NARCOTICS STOCKPILES VARY WIDELY SHOULD THE PROHIBITION REMAIN BEYOND 2001 AND STOCKPILES DWINDLE SHIFTS IN POPPY CULTIVATION PATTERNS WITHIN THE REGION AND ACCOMPANYING CHANGES IN TRAFFICKING ROUTES AND METHODS ARE LIKELY USERS IN REGIONAL MARKETS - SUCH AS INDIA IRAN AND PAKISTAN WHICH HAVE LARGE ADDICT POPULATIONS - PROBABLY WOULD SUFFER FROM SHORTAGES BEFORE CONSUMERS IN EUROPE AND RUSSIA AS SMUGGLERS DIVERT HEROIN SHIPMENTS TO MORE LUCRATIVE MARKETS EUROPEAN AND RUSSIAN CONSUMERS page 28 WOULD SEE HIGHER HEROIN PRICES 6 t@y IF THE TALIBAN'S POPPY BAN IS IN EFFECT BEYOND 2002 AND GLOBAL HEROIN DEMAND REMAINS CONSTANT OPIUM PRODUCTION IN OTHER MAJOR SOURCE AREAS - SOUTHEAST ASIA AND LATIN AMERICA - COULD CHANGE MARKEDLY UNSATISFIED DEMAND IN THE MAJOR EUROPEAN MARKET PROBABLY WOULD STIMULATE INCREASED PRODUCTION IN SOUTHEAST ASIA AND LATIN AMERICA AS HEROIN FROM THESE SOURCES MAKES ITS WAY TO EUROPE NEW OR SELDOM USED TRAFFICKING ROUTES WOULD COME INTO PLAY MOREOVER NEW RELATIONSHIPS MAY DEVELOP AMONG TRAFFICKERS FROM SOUTHWEST AND SOUTHEAST ASIA LATIN AMERICA AND EUROPE OVER THE NEXT FEW YEARS THESE DEVELOPMENTS WOULD HAVE ONLY A MODEST IMPACT ON THE US HEROIN MARKET POSSIBLY REFLECTED IN CHANGES IN PRICE PURITY AND SUPPLIERS litlitttlttitltltlitltltlt111lttllttitttllltlllltllllliitltt tlliti NON RESPONSIVE TO THE REQUEST ittilttlitlttllltitttttllltllttttitilllltlltlliltttlittttttitttttt b 3 10 USC 424 page 29 DERIVIED FROM ADMIN DECLASSIFY ON Xr BT #6671 28EI NNNN 0 CR f page 30