The Taliban and other warlords could clear almost half a billion dollars from Afghanistan's opium trade this year — money that will help finance insurgent attacks, the United Nations' drug czar said.

Antonio Maria Costa, head of the U.N.'s Office on Drugs and Crime, said the Taliban also appears to be stockpiling the drug to manipulate its price, after several years in which production surpassed world demand.

Afghanistan produces over 90 percent of the world's opium, the raw ingredient for making heroin.

"By year end, warlords, drug lords and insurgents will have extracted almost half a billion dollars of tax revenue from drug farming, production and trafficking," Costa said in a summary of the U.N.'s annual Afghanistan opium survey, published Thursday.

"Not surprisingly the insurgents' war machine has proven so resilient, despite the heavy pounding by Afghan and allied forces," Costa said.

The figures are a worrisome sign for the U.S. and NATO commanders who have long insisted that there is a direct link between the insurgency they are fighting and the booming drug trade, especially in Afghanistan's south.

The potential profits are dramatically higher than the $100 million that the Taliban is believed to have received last year from the multibillion-dollar trade.

In a sign that the military alliance sees the drug trade as a strategic threat, NATO defense ministers authorized their troops in Afghanistan last month to attack drug barons deemed to be supporting the insurgency.

The U.N. report said production of opium dropped by 6 percent in 2008 to 7,700 tons, cultivated by 1 million fewer farmers than in 2007. Its export value is estimated at $3.4 billion, it said.

The area under cultivation also dropped by 20 percent from 2007 to 388,000 acres (157,000 hectares), virtually all of it in Afghanistan's south and west, where the Taliban-led insurgency is the most active, the report said.

Costa noted that Afghan opium production has exceeded world demand for a number of years.

"The bottom should have fallen out of the opium market. It has not," he said.

The most likely explanation for the disparity is that the drugs are being stockpiled by the Taliban, which could use future price increases to continue funding its insurgency against Afghan, U.S. and NATO forces, Costa said.

The only way to keep prices and production down — and thus keep money out of Taliban pockets — is by "destroying high-value targets like drug markets, heroin labs and trafficking convoys moving to the southwestern borders," Costa said.

Since most production is now concentrated in one region, attacking those involved there is needed, Costa said.

"In crude medical terms, the opium chemotherapy applied throughout Afghanistan has shrunk the cancerous metastasis to the southern region, where surgery is now needed and feasible," he said.