“The FARC are looking at their Plan B, and their obvious Plan B is the ELN,” he said by phone from Medellin. “Certainly in the 60-odd municipalities where they co-habit, we think it’s very likely that there will be a transfer of these criminal economies, gold and coca, to their revolutionary cousins.”

The Colombian government and the ELN announced the start of a formal peace process on March 30, although negotiations have yet to start. The ELN has no intention of sitting down to talk until first seeing how the FARC agreement pans out, Builes said.

Eoin Treacy's view

The ability of Mexican drug cartels to import the raw materials for fentanyl directly from China and manufacture pills either in Mexico or the USA, therefore bypassing Colombia entirely, represents a major threat to the latter’s business model. More than any other factor that may have played a role in the FARC’s decision to agree to talks. Nevertheless, the market for cocaine might not be growing as quickly as it once did but it still represents a multibillion Dollar business. Logically, someone will ensure it keeps going regardless of deals with the government. This article by also be of interest.

In line with other commodity related currencies, the Colombian Peso found support in February and has since closed a wide overextension relative to the trend mean. The Dollar encountered resistance in the region of the MA four weeks ago and a sustained move above COP3100 would be required to question medium-term supply dominance.

The Global X MSCI Colombia ETF collapsed in 2014 and 2015 but has been consolidating in the region of the trend mean since April and a sustained move below $8.29 would be required to question medium-term demand dominance.