When examining the transnational behavior of Mexican cartels, the most important factor influencing that behavior is without a doubt the economics of the cocaine trade. Cocaine is derived from the leaves of the coca plant, and three countries — Colombia, Peru and Bolivia — account for all the coca harvested in the world. Turning coca into cocaine hydrochloride is a relatively simple three-step process: harvested coca leaves are rendered into coca paste, which is then processed into cocaine base, which eventually becomes cocaine hydrochloride (or cocaine). As cocaine progresses from the production site to the end users, it increases in value. For the fresh leaf used in processing in Colombia, it costs somewhere between $585 and $780 to produce 1 kilogram of cocaine base, depending on the variety of coca plant used. A kilogram of cocaine can then be purchased for $2,200 in the jungles in Colombia's interior and for between $5,500 and $7,000 at Colombian ports. But the price increases considerably once it leaves the production areas and is transported closer to consumption markets. In Central America cocaine can be purchased for $10,000 per kilogram, and in southern Mexico that same kilogram sells for $12,000. Once it passes through Mexico, a kilogram of cocaine is worth $16,000 in the border towns of northern Mexico, and it will fetch between $24,000 and $27,000 wholesale on the street in the United States. In an effort to increase their share of the cocaine profit chain, Mexican cartels are steadily working to grab portions of the cocaine smuggling chain not yet under their control by increasing their involvement in production, smuggling and distribution activities. With a business model of selling cocaine at over 10 times the cost of acquisition — and even greater over the cost of production — it is not surprising that the competition among the various Mexican cartels for the smuggling corridors through Mexico to the United States has become quite aggressive.
