Cocaine Trade Hits Record High as Smugglers Go Global

Summary

WSJ What’s News: Cocaine Trade Hits Record High as Smugglers Go Global

Release Date: May 5, 2025
Host: Luke Vargas
Produced by: The Wall Street Journal

---

1. Warren Buffett's Succession Plan

The episode opens with significant corporate news as Berkshire Hathaway's CEO, Warren Buffett, announces his retirement plan. At [00:56], Luke Vargas reports:

“Berkshire Hathaway Chief executive Warren Buffett plans to step down at the end of the year with the 94-year-old handing over the reins to his hand-picked successor, Greg Abel.”

Greg Abel's selection as Buffett's successor was anticipated, calming investor anxieties in Omaha and earning widespread tributes from Wall Street veterans. Despite stepping down, Buffett assures continuity and involvement in the company's future:

“He said he didn't plan to disappear from the scene,” Vargas notes, highlighting Buffett’s intention to remain influential beyond his tenure.

2. Political Shifts: Trump’s Influence and Australian Elections

The podcast delves into the global political landscape, focusing on President Trump's influence and unexpected election outcomes. At [02:12], Juan Ferrero provides insights into the political climate:

“There are many people on Wall street say this is going to be the greatest windfall ever happened. And that's my question. Long term, is it okay in the short term to have a recession? Look, yeah, everything's okay.”

This segment underscores the optimistic yet cautious economic projections amidst political maneuvers. President Trump remains confident about his economic policies, believing they will spark a historic boom, as mentioned by Vargas at [02:12].

In a surprising turn, Australian Prime Minister Anthony Albanese secures a landslide victory for the Labour Party, reminiscent of Canada's recent electoral success for their left-leaning Liberal party. Sydney-based reporter Mike Cherney explains at [03:58]:

“Albanese successfully sold an argument to voters that he was a pair of stable hands and best suited to deal with some of this Trump related disruption.”

Albanese's victory signals a shift towards stability and a measured approach in managing Australia’s alliance with the U.S., especially concerning trade negotiations and defense procurements, as elaborated by Cherney at [04:35].

3. The Escalating Global Cocaine Trade

The core focus of the episode centers on the alarming rise in global cocaine production and the innovative methods smugglers employ to distribute the drug worldwide. At [08:05], Luke Vargas introduces the in-depth report:

“Global cocaine supply has hit an all-time high. And while production has been steadily climbing for the past decade, drug officials are growing increasingly alarmed over the sheer speed of coca growth and new undersea modes of transport as the potent powder reaches new and faraway markets.”

Juan Ferrero, the South America bureau chief, provides a comprehensive analysis from Bogotá, Colombia. At [08:31], Ferrero highlights the dramatic increase in coca cultivation:

“What's happened lately is that coca, the leaf used to make cocaine and cocaine itself has just shot up dramatically to record highs in Colombia. Now the UN says there are 625,000 acres of coca now, that’s about the size of Rhode Island.”

This represents a 55% increase since 2000, escalating the capacity to produce approximately 3,000 tons of cocaine annually. Ferrero emphasizes the diversification of markets, extending beyond traditional consumers in the United States, Brazil, and Western Europe to regions like Argentina, the Balkans, Australia, and New Zealand.

At [10:03], Ferrero discusses the evolving supply chain:

“One of the new trends we're seeing are the semi-submersibles. These are submarine-like vessels... they're far better now... we’re seeing them head to the South Pacific... that's how much money is to be made by selling cocaine in some of these countries.”

These semi-submersibles can traverse up to 9,000 miles, facilitating the reach of cocaine into previously inaccessible markets despite the inherent risks of such perilous journeys.

4. Colombian Government's Response

The Colombian government's strategies—or lack thereof—in combating this surge are critically examined. At [11:10], Ferrero critiques the government's approach:

“Colombia's government has taken the approach that it wants to steer clear of penalizing farmers... they have been trying to enter into peace talks with some of these narcotics trafficking outfits, but that has not worked.”

This policy has inadvertently empowered armed groups, turning parts of Colombia into de facto states where these groups wield significant power, thus undermining national stability and efforts to curb cocaine production.

5. U.S. Perspective and Drug Policy

In the United States, the focus has traditionally been on controlling methamphetamines and fentanyl, primarily trafficking through Mexico's southern border. However, cocaine remains a significant concern. At [12:12], Ferrero notes:

“Cocaine remains a very important drug in the United States... in as many as a quarter of the cases of cocaine that has been seized by the DEA and tested shows that it has fentanyl in it, which is... extremely dangerous.”

This intersection of cocaine with fentanyl exacerbates overdose risks, presenting new challenges for U.S. drug enforcement and public health strategies.

6. Additional Business Insights

Beyond the primary topics, the episode touches on several other business and economic developments:

• Oil Markets: Oil futures are declining as OPEC agrees to raise output for June, prompting Goldman Sachs to revise its oil price forecasts downward ([05:01]).

• Airline Industry: Newark Liberty International Airport faces ongoing disruptions after United Airlines cancels 35 daily flights due to air traffic controller shortages and technical issues ([05:01]).

• Pharmaceutical Advances: Novo Nordisk's FDA acceptance of a new oral formulation for its obesity treatment Wegovy marks a significant milestone, competing with rivals like Eli Lilly ([05:01]).

• Federal Reserve Decisions: Markets are closely watching the Fed’s upcoming interest rate decision amidst pressures from President Trump to lower rates sooner than anticipated ([05:01]).

7. Conclusion

The episode concludes by reiterating the critical nature of the global cocaine trade and its far-reaching implications for international security, public health, and economic stability. The Wall Street Journal's in-depth reporting provides listeners with a comprehensive understanding of these complex issues, highlighting the urgent need for coordinated global responses to curb the burgeoning cocaine epidemic.

---

Notable Quotes:

• Juan Ferrero on Coca Plantations:
  “[...] there's 625,000 acres of coca now, that's about the size of Rhode Island” ([08:31]).

• Mike Cherney on Australian Elections:
  “Albanese successfully sold an argument to voters that he was a pair of stable hands and best suited to deal with some of this Trump related disruption” ([03:58]).

• Juan Ferrero on Supply Chain Innovations:
  “These semi-submersibles... they're far better now... we're talking about 9,000 miles. It's very far” ([10:03]).

---

This comprehensive summary encapsulates the multifaceted discussions of the WSJ What’s News episode, providing listeners and readers with a clear and detailed overview of the pressing issues surrounding the global cocaine trade, political shifts, and significant business developments.

Transcript

[Morningstar Voice]

Data is everywhere. When orchestrated properly, it sings. At Morningstar, we analyze and enrich data, making it actionable and powerful for you. Morningstar, where data speaks.

[Luke Vargas]

Warren Buffett marks the calendar for his departure from Berkshire Hathaway. Plus, the Trump factor propels another left leaning leader to a surprise election victory, this time in Australia. And we'll hear from our South America bureau chief in Colombia as global cocaine production hits an all time high.

[Juan Ferrero]

We're seeing semi submersibles in the last few years heading to Spain and Portugal and to the South Pacific. So we're talking about 9,000 miles. These are dangerous trips, but that's how much money is to be made by selling cocaine in some of these countries.

[Luke Vargas]

It's Monday, May 5th. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of what's news, the headlines and business stories moving your world today, Berkshire Hathaway Chief executive Warren Buffett plans to step down at the end of the year with the 94 year old handing over the reins to his hand picked successor, Greg Abel. Abel's selection wasn't a surprise, though. The timing of the announcement was silencing a cavernous arena of investors in Omaha, Nebraska on Saturday and triggering a wave of tributes from Wall street tit. While Buffett said that able would have final say at Berkshire starting next year, he said he didn't plan to disappear from the scene and used his remarks at the company's annual meeting, heard here courtesy of cnbc, to defend the global trade system, criticizing the antagonistic approach being taken in Washington toward America's economic partners.

[Juan Ferrero]

It's a big mistake in my view, when you have 7.5 billion people that don't like you very well and you got 300 million that are crowing in some way about how well they've done.

[Luke Vargas]

Meanwhile, President Trump is downplaying concerns about the economy, emphasizing that he believes his policies will trigger a historic boom. That forecast made on NBC's Meet the Press comes as we report that Trump and his advisers are feeling more confident following a streak of stock market gains and a better than expected jobs report on Friday.

[Juan Ferrero]

There are many people on Wall street say this is going to be the greatest windfall ever happened. And that's my question. Long term, is it okay in the short term to have a recession? Look, yeah, everything's okay. What we are. I said this is a transition period. I think we're going to do fantastically. Are you worried about a recession? No.

[Luke Vargas]

While the White House is signaling that it expects some progress to cool trade tensions this week, including by announcing at least one deal with a country seeking to escape higher tarif. President Trump said yesterday he'd authorized a new 100% tariff on films produced overseas that sent Hollywood executives scrambling to determine how they'd be affected. Having received no prior warning about the plan, and because movies aren't physical goods like most items subject to tariffs, the White House didn't immediately respond to a request for comment. Australian Prime Minister Anthony Albanese has returned to power in a surprising landslide election victory for his Labour Party. That comes as just last week Canadians gave the left leaning Liberal party there a fourth term in office as voters shied away from a Conservative candidate viewed as being too similar to President Trump. And Sydney based reporter Mike Cherney says a similar dynamic played out in Australia.

[Mike Cherney]

Albanese successfully sold an argument to voters that he was a pair of stable hands and best suited to deal with some of this Trump related disruption. His conservative opponent Peter Dutton to many voters perhaps came off as a little bit too Trump like Dutton did support some Trump like policies like slashing the government workforce and ending working from home for some government employees. And I think in the end that did put off some centrist voters.

[Luke Vargas]

And with Trump proving to be a divisive figure for many Australians, Mike explains how Albanese will be looking to manage the country's future alliance with the U.S.

[Mike Cherney]

Albanese did have to walk a fine line with Trump during the campaign because he's now going to have to work with Trump on trade talks to try to reduce Australia's tariff rate to zero. Australia also plans to buy nuclear powered submarines from the US and there are some concerns about whether the US has the shipbuilding capacity to make that happen. So Albanese is going to have to figure out a way to make sure that the Trump administration continues to support that plan.

[Luke Vargas]

To Europe now, where Ukraine has set it downed two Russian jet fighters using sea drones equipped with modified US Made missiles in what military officials in Kyiv say is the first such attack in the history of warfare. Russia's military hasn't commented on the attack, which the Wall Street Journal wasn't able to verify. With Russia grinding slowly forward on the battlefield and Ukraine struggling with the deficit of arms and manpower, the shootdowns demonstrate how Ukraine is finding ever more enterprising means of weakening Russia's much larger military. In other news driving the agenda this week, oil futures are slipping after the OPEC group of producers agreed to raise output for June, marking a second consecutive month of production hikes. In response, Goldman Sachs cut its oil price forecast with the firm now expecting Brent and West Texas Intermediate crude to average 56 and $52 a barrel next year, respectively. There is no end in sight for the headaches plaguing travelers to and from Newark Liberty International Airport after its leading Operator United, canceled 35 daily round trip flights after a group of air traffic controllers took leave amid issues with their radar and radios. Several controllers took trauma related leave after a outage last fall and the Federal Aviation Administration has at times slowed traffic to Newark as a result of controller staffing issues. Danish drugmaker Novo Nordisk says the US Food and Drug Administration has accepted a new drug application for an oral formulation of its blockbuster obesity treatment Wegovy. If approved, it would mark the first so called GLP1 drug to be available in pill form amid competition from the likes of Eli Lilly and others. Novo Nordisk said the FDA's deadline to decide on the application will be in the fourth quarter and it is shaping up to be a busy week in markets with services, PMI's for April due out this morning and earnings from Ford expected this afternoon, though the biggest set piece will be the Fed's interest rate decision on Wednesday, with the central bank facing pressure from President Trump to lower rates sooner than the current June forecast. Coming up, potent powder and narco subs are driving a global surge in cocaine smuggling. We'll get the latest from Colombia on the exploding coca trade, alarming American officials after the break.

[Morningstar Voice]

Data is everywhere. When orchestrated properly, it sings. At Morningstar, we analyze and enrich data, making it actionable and powerful for you Morningstar where data speaks.

[Luke Vargas]

Global cocaine supply has hit an all time high. And while production has been steadily climbing for the past decade, drug officials are growing increasingly alarmed over the sheer speed of coca growth and new undersea modes of transport as the potent powder reaches new and faraway markets. Our South America bureau chief Juan Ferrero has been tracking cocaine production in Colombia. Juan, bring us up to speed here. What has shifted in the past few.

[Juan Ferrero]

Years, what's happened lately is that coca, the leaf used to make cocaine and cocaine itself has just shot up dramatically to record highs in Colombia. Now the UN says that, and this is in a report from late last year said that there's 625,000 acres of coca now, that's about the size of Rhode island And that is 55% more than in 2000. And there was so much cocaine that year in 2000 that this drug was funding armed groups that were threatening the very Colombian state. And these American officials say we were really worried that the state would be toppled. Now, that was in 2000. Now there's 55% more coca in the country. And that produces, you know, the estimate that the UN gives is about 3,000 tons of cocaine. That cocaine is now not just going to the United States, not just going to Brazil and Western Europe, which have for a long time been sort of the big main consumers. But it's going to places like Argentina, like the Balkans, it goes to Australia, New Zealand. There's always new markets because in a lot of these markets, the amount that is being spent on cocaine just makes it very worthwhile from a business standpoint for drug trafficking.

[Luke Vargas]

You talk about a lot of this coca cultivation want happening in very remote areas and yet reaching markets around the world. What is the supply chain for this drug like now? It's not being carried on foot.

[Juan Ferrero]

Some of the supply chain, the way that they're getting the cocaine to some of these markets is the same old, same old cargo vessels go fast boats which leave from Colombia and go to Central America and so forth. But I think one of the new trends we're seeing are the semi submersibles. Now, these are submarine like vessels. They have been around for a long time, you know, but they're far better now. They have better propulsion, they're bigger, they can carry more cocaine, and they can go a lot farther. So we're seeing semi submersibles in the last few years heading to Spain and Portugal and so forth. But now we're seeing semi submersibles en route to the South Pacific. So we're talking about 9,000 miles. It's very far. And of course, these are dangerous trips. But increasingly we're seeing these semi submersibles head in that direction. That's how much money is to be made by selling cocaine in some of these countries.

[Luke Vargas]

What does the Colombian government make of all this? If there really is territory the size of Rhode island being used to cultivate a drug like this, they can't be unaware of what's going on.

[Juan Ferrero]

Colombia's government has taken the approach that it wants to steer clear of penalizing farmers. And so they are very much opposed to aerial fumigation. They call themselves a progressive government, and they have been trying to enter into peace talks with some of these narcotics trafficking outfits, but that has not worked. And there are many studies and many people who believe that these groups have actually grown far more powerful. So the de facto state in some of these places is an armed group. So this policy hasn't really gone anywhere.

[Luke Vargas]

And how is this going over in the United States. Obviously, President Trump has made a big deal about the flow of drugs over the southern border.

[Juan Ferrero]

You know, they're very focused on methamphetamines and fentanyl and so forth. The main focus has been Mexico and has been the border. And so we haven't seen them talk about cocaine. But of course, a big thing with the administration is to stop the flow of drugs into the United States. And cocaine remains a very important drug in the United States. I mean, cocaine is, is laced with fentanyl in as many as a quarter of the cases of cocaine that has been seized by the DEA and tested shows that it has fentanyl in it, which is, of course, an extremely dangerous drug that causes a lot of overdoses and fatalities.

[Luke Vargas]

That was Wall Street Journal South America Bureau chief Juan Ferrero in Bogota, Colombia. Juan, thank you so much for bringing us this story.

[Juan Ferrero]

Thank you.

[Luke Vargas]

And that's it for what's news for this Monday morning. Today's show was produced by Kate Bullifant. Our supervising producer is Sandra Kilhoff. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.

[Morningstar Voice]

Data is everywhere. When orchestrated properly, it sings. At Morningstar, we analyze and enrich data, making it actionable and powerful. For you, Morningstar, where data speaks.