Commodities boom is luring criminals in search of scores
Sergeant Tosha Ternes spends most of her time at the Saskatoon Police Service investigating cases of breaking and entering. In recent months her department has seen a “drastic” increase in one type of crime: lumber theft from construction sites.
“Everything’s just lying there, kind of like a free-for-all,” Ternes says from the Saskatchewan city in Canada’s prairie region. “Some sites have been hit two, three, four times.”
Theft of commodities such as lumber, metals, and food crops is nothing new. Yet the combination of soaring prices, the coronavirus pandemic, and the hit to economies has created an unusually fertile ground for criminals.
Statistics are hard to come by because authorities use different data and much of it is from before the pandemic took hold. But interviews with experts, law enforcement agencies, and victims paint a picture of a spike in criminal activity as the jump in commodity prices fuels talk of another “supercycle” like the one in the first decade of the century.
In Chile, where the price of copper is tracked by bankers and taxi drivers alike because of its economic importance, gangs target freshly smelted stacks of the metal as it travels on rail cars. When thieves strike, police dressed in “war gear” give chase in patrol cars, says one officer in the Antofagasta region, which is home to some of the world’s biggest copper mines.
There are reports out of Germany, the U.K., and the U.S. of catalytic converters in cars being harvested for their precious metals. In Nigeria, which like many developing countries is suffering from runaway inflation in food prices, some farmers complain that thieves are targeting crops. “They used to steal in small quantities before,” says Johnson Akinwunmi, a farmer in Ondo state who grows cocoa and cassava. “But now it’s been at an all-time high since December.”
Then there’s what’s known as food fraud, which can mean adulterating food, or replacing it with an inferior product, or faking its origin. In Malaysia, some criminals are repackaging used cooking oil in tins or painted bottles to pass it off as palm oil, a staple that’s become more costly.
In India at least 500 people fell ill in April after consuming adulterated buckwheat flour. Police say there’s a notable increase in the common practice of cutting spices such as turmeric and chili with cheaper—and often toxic— substances, including rice flour and aniline dyes.
Amarendra Panda, an assistant commissioner of police in Cuttack in the eastern Indian state of Odisha, says his officers have raided about 20 premises recently and confiscated what he calls “adulterated commodities” worth millions of rupees, or tens of thousands of dollars. “Their motive was to earn huge profits by investing as little as possible,” he says.
U.S. lumber prices soared to an all-time high in May and are now more than double what they were a year ago. Copper is up 70% over the same period, having also hit a record last month. Global food prices increased for a 12th straight month in May to the highest in almost a decade.
“The value on the black market of commodities changes just like they do above board,” says Jim Yarbrough, who leads a team at the British Standards Institution that monitors supply chain risks, including terrorism. “That’s going to drive criminal activity just like all other forms of supply and demand.”
While soaring prices have provided an incentive for commodity related crime, the pandemic has furnished fresh opportunities. Disruptions to supplies and reduced availability of some materials mean managers must at times resort to doing business with previously untested suppliers, says Kimberly Carey Coffin, global technical director at Lloyd’s Register, a quality assurance company.
Even seasoned buyers are in danger of being duped. Last summer, Swiss commodities trading firm Mercuria Energy Group Ltd. struck a deal to buy $36 million of copper from a Turkish supplier but got a load of painted paving stones instead.
Since the end of 2019, copper robberies in the northern Chilean province of Antofagasta have increased about 30%, according to Egidio Ojeda, an officer with Chile’s investigative police. While some of that can be attributed to the remoteness of the mines and a surge in social unrest that preceded the pandemic, it also reflects a huge runup in the market price for the metal.