NGOs claim that increases in demand are driving the elephant poaching crisis. Research by Brendan Moyle an economist at Massey University in New Zealand concludes that supply not demand factors are driving poaching, in particular low shipping costs and political instability in Africa.
Moyle employs a panel data regression model to identify possible causes of the upsurge in poaching. He finds that the large decline in shipping costs after the global financial crisis is strongly correlated to the rise in large shipments interdicted in recent years.
Other factors include decline in global interest rates which motivates increased stockpiling by criminal organizations. Declines in political stability also motivate criminals to move stockpiles out of the continent away from the hands of rival gangs.
Moyle finds that the throughput of illegal ivory is not making its way to feed consumer demand but is being stockpiled.
“An illegal stockpiling strategy is perturbing. The economic rationale for stockpiling ivory is that ivory-prices are expected to rise (Kremer and Morcom, 2000). Key participants in the black-market are banking on demand for ivory to be robust enough to sustain price increase into the future. Supply measures like CITES effectively ceasing ivory exports from 2008 onwards after the one-off sale to China and Japan may encourage this expectation. It would be imprudent to disregard this expectation by traffickers given their knowledge of the market”.
Moyle concludes that continuing low shipping costs do not augur well for an immident reduction in poaching.