The South Africa – Viet Nam Rhino Horn Trade Nexus (PDF ... - WWF

situation at the source: south africa
Wildlife Industry Professional – Legal
trophy horn or illegal “loose” horn
Africa-based Asian Syndicate Dealer –
Procurement in South Africa, transport
to Viet Nam
Vietnamese Retail Seller – End-use
market
Figure 29 Relative value of rhino horn through a trade chain involving game industry seller, Africa-based Asian
syndicate dealer and Vietnamese retail seller
In the early 1990s, analysis of rhino horn price dynamics along the trade chain showed that price values
increased the further the horn moved away from the source (Milliken et al., 1993). At that time, entire
rhino horns could be obtained for as little as USD100 in a first-round exchange between poachers and
Africa-based middleman dealers; thereafter, valuation became linked to weight in kilogrammes and horns
would be moved from Africa to Asia by exporters for between USD250 and USD500/kg and enter an enduse
market at the wholesale level for around USD800/kg (Milliken et al., 1993). Because trophy hunting of
rhinos was, comparatively speaking, such a costly undertaking, few observers imagined that it would ever
become an avenue for commercial trade in rhino horn. Remarkably, that development has now occurred
and there is little doubt that the value of rhino horn in Africa has skyrocketed in recent years.
While it is recognized that price is a critical element in tracking and understanding demand for any
commodity, the authors of this report acknowledge that providing price data in a public document
could also be counterproductive. In TRAFFIC’s experience, it has been noted that the public dissemination
of high-value price data can, and often does, lead to unintended consequences for vulnerable,
conservation-dependent species such as rhinos. To be more specific, there are numerous documented
reports where individuals, who may not otherwise have done so, became directly involved in criminal
activity on the basis of understanding the value of certain wildlife products. Similarly, law-enforcement
authorities have failed to interdict illegal consignments, but rather have proposed and accepted bribes
on the basis of their awareness of the relative values of certain wildlife trade commodities. For these
reasons, the authors feel it is inappropriate and potentially irresponsible to reveal contemporary unit
prices for rhino horn in this report.
TRAFFIC has compiled data on observed and published rhino horn prices at various points in the trade
chain from source to retail outlets. Examination of these data in Figures 29 and 30 reveals how the relative
price of rhino horn alters as the product changes hands along the trade chain. The price of rhino
horn is influenced by a number of factors, including its source and the pathway it has taken to an enduse
market in, for example, Viet Nam. In general, longer trade chains with numerous changes of hand
can lead to higher prices. A typical scenario is depicted in Figure 29 whereby a South African game
rancher offers a legal rhino horn hunt or sells unregistered rhino horn to an Asian syndicate which
either provides a “bogus” hunter to kill a live rhino or simply acquires “loose” rhino horns on a “cash
and carry” basis. These syndicate players then arrange for transport of the horns to Asia and often market
them directly to retailers who, in turn, sell horn pieces to end-use consumers.
Trade chains for poached horn are often more complex and involve a greater number of players. It can
be seen that, although local poachers generally take the greatest risks to illegally kill a rhino, they
invariably receive the least amount of money from middleman players who reap far greater rewards
Local Poacher – Poaching in South African
protected area or game ranch
Middleman Collector/Courier – Buyer of
poached horns in South Africa
Africa-based Asian Syndicate Dealer –
Procurement in South Africa, transport
to Viet Nam
Vietnamese Retail Seller – End-use
market
Figure 30 Relative value of rhino horn through a trade chain involving local poacher, middleman collector/courier,
Africa-based Asian syndicate dealer and Vietnamese retail seller
when selling horns onward to Asian syndicate dealers (Figure 30). The possibility of being detected and
penalized often leads poachers and collectors/couriers to sell quickly and below optimum prices to realize
immediate income (’t Sas-Rolfes, 2012) As before, price values for syndicate dealers and retail sellers
in end-use markets remain greatest. In fact, retail sellers in Viet Nam may be directly linked to the
Asian dealers in Africa so that the profitability of a single transaction may include all stages beyond the
middleman collector/courier in both Africa and Asia.
End-use market profitability ultimately drives poaching and illegal trade, price provides the most significant
indicator of what is happening in the market, and current rhino horn prices are believed to be
inelastic, meaning that the volume of rhino horn being traded is mostly insensitive to increases in
price (’t Sas-Rolfes, 2012). Some argue that rising prices, as has been the case in Viet Nam in recent
years, indicate that a product is becoming increasingly scarce, and that this typically will lead to an
increase in poaching activity at the source (’t Sas-Rolfes, 2012). Other observers, however, provide evidence
on potential trade flows from South Africa to Asia that suggest that the number of rhino horns
in illicit commerce has been steadily increasing and, in 2011, reached 940 horns, weighing an estimated
3760 kg (Eustace, 2012). If so, product scarcity may not be a likely explanation and conventional
supply and demand relationships may not necessarily be the operative factor.
It is conceivable that Viet Nam’s rhino horn trade may represent the phenomenon known as an “economic
bubble”, whereby trade in rhino horns is consistently taking place at highly inflated values, and
prices are impossible to predict on the basis of conventional supply and demand assumptions (Lahart,
2008). Economic bubbles are usually conclusively understood only in retrospect following a sudden
and sustained drop in price; until that moment, inflated values can be the product of price coordination
by those holding the supply (Levine and Zajak, 2007), and may be further buttressed by emerging
social customs (Hommes et al., 2005). In fact, the rhino horn trade in Viet Nam is believed to be controlled
by a relatively small number of syndicate suppliers and the consumption of rhino horn has
taken on extreme faddist dimensions in a status-conscious country, attributes that characteristically
support the perpetuation of economic bubbles (see the “Rhino horn consumers in Viet Nam” section in
the Viet Nam chapter below). Finally, the role of speculation in the end-use market is also poorly
understood but may be an important consideration in understanding rhino horn price dynamics.
South African government response to the crisis
In addition to the regulatory response made in updating legislative policy to close loopholes being exploited
to legally export horn from trophy hunts, the DEA has also instigated structural and organizational
86 the south africa – viet nam rhino horn trade nexus TRAFFIC 87