Production of opium in Myanmar has flourished since the military's seizure of power, with the cultivation of poppies up by a third in the past year, according to a United Nations' report released on Thursday.

Key points:

• The UN says virtually all the heroin seized in Australia originates in Myanmar
• It estimates the overall value of Myanmar's opiate economy ranges between $660 million and $2 billion
• Myanmar's synthetic drug economy has also been surging

Eradication efforts have dropped off and the faltering economy has led more people toward the drug trade, the report found.

In 2022 — in the first full growing season since the military wrested control of the country from the democratically elected government of Aung San Suu Kyi in 2021 — Myanmar saw a 33 per cent increase in the area of poppies under cultivation to 40,100 hectares, according to the UN Office on Drugs and Crime report. 

"Economic, security and governance disruptions that followed the military takeover of February 2021 have converged, and farmers in remote, often conflict-prone, areas in northern Shan and border states have had little option but to move back to opium," the UN office's regional representative, Jeremy Douglas, said. 

The overall value of the Myanmar opiate economy, based on UN estimates, ranges between $660 million and $2 billion, depending on how much was sold locally, and how much of the raw opium was processed into heroin or other drugs. 

"Virtually all the heroin reported in East and South-East Asia, and Australia, originates in Myanmar, and the country remains the second-largest opium and heroin producer in the world after Afghanistan," Mr Douglas said.

"There is no comparing the two at this point [because] Afghanistan still produces far more, but the expansion underway in Myanmar should not be dismissed, and needs attention, as it will likely continue. It is directly tied to the security and economic situation we see unfolding today."

The "Golden Triangle" area — where the borders of Myanmar, Laos and Thailand meet — has historically been a major production area for opium and has hosted many of the labs that convert it to heroin.

Decades of political instability have made the frontier regions of Myanmar — also known as Burma — largely lawless, to be exploited by drug producers and traffickers.

Most of the opium exported by Myanmar goes to China and Vietnam, while heroin goes to many countries across the region, Mr Douglas said. 

"It is really where the value is for traffickers," he said. "Very high profits."

The cultivation of opium had been trending downward in recent years before the military took control of the government in 2021.