The large electrical transformers bound for Mexico were the perfect place to hide cocaine.

It was a matter of chemistry to dilute the drug into an oil mixture that could be concealed as coolant, a job handled by a Mexican engineer working discretely in a suburban warehouse near Buenos Aires, Argentina.

The transformers carrying two tons of liquefied cocaine from Bolivia were loaded onto a cargo vessel at a Buenos Aires port and shipped out to sea. But investigators had been watching the operation and when the shipment arrived, an Argentine judge was on hand to insist on a test that, to the astonishment of authorities at one of Mexico’s most secure ports, revealed the drug.

The traffickers, Judge Sandra Arroyo said, had used “an ingenious and logistically novel method for the deception”.

The interception earlier this year called attention to a worrying trend in Argentina, the increasing use of its roads and ports as a trade route for cocaine and other drugs bound for markets in the US, Europe and beyond.

Bordered by long stretches of sparsely developed land to its north and west, and 3,100 miles (nearly 5,000 kilometres) of Atlantic coastline on the east, Argentina is proving attractive for traffickers exporting cocaine from neighbouring Bolivia and from nearby Peru, which last year surpassed Colombia to become the world’s biggest cocaine producer.

US-led efforts to stifle the drug trade in more northern countries and in the Caribbean have pushed the traffic south to Argentina, according to drug experts and justice officials. The country also is proving to be a place where artisans are crafty at hiding contraband.

Drugs passing through Argentina have been found in the hollow frames of wheelchairs, moulded into religious statues, tucked into baby diapers, in shipments of lumber and apples, and hidden in Louis XV-styled furniture.

“Argentina’s speciality is logistics,” said Marcelo Aguinsky, a criminal judge who has investigated trafficking cases. Its status as a shipping point for all sorts of Europe-bound products, he said, “has made it an important logistical platform”.

Argentine authorities have not publicly released statistics on the drug trade, a subject considered sensitive by the government of Cristina Fernandez. But several narcotics experts said that seizures being made at sea and abroad point to more drugs passing through the country.

Argentina “is used to send drugs to Europe,” said Soren Pedersen, spokesman for Europol, the umbrella organisation for EU police forces. “This isn’t a phenomenon that is completely new, but the signs that Latin American cartels are operating from there — especially maritime seizures — indicate it has increased.”

In 2013, 6.1 tons of cocaine were seized according to Argentine officials who asked not to be named because they were not authorised to speak publicly about the matter. While that’s far less than the hundreds of tons seized each year in countries such as Peru, Colombia or Mexico, officials say the amounts seized in Argentina have been trending higher since 2010.

On average, between 70 tons and 110 tons of cocaine and other drugs move through Argentina, according to a US federal official who refused to be named. Judging from seizures in Europe, Africa and Asia, he said, the figure for 2014 could be higher.

The rising use of Argentina as a passageway is also leading to greater consumption within the country, fuelling growing violence between gangs battling to control turf and markets.

For example, the city of Rosario sits at a strategically important pathway between Argentina’s northern border and Buenos Aires.

Last year, the city of fewer than one million people had a homicide rate of 27 per 100,000 inhabitants, up from 15.2 per 100,000 a year earlier and nearly four times the rate for the much larger city of Buenos Aires, officials said.

Observers say Rosario’s position as a transit point is leading to corruption, evidenced by the arrest last year of the police chief for Santa Fe, the province that includes Rosario, who allegedly provided protection for an Argentine dealer and conspired with him to sell drugs.

Arroyo, the judge who in April insisted Mexican port officials test the transformer oil, said the investigation into that case suggests Argentina’s role in the drug trade is expanding and drug cartels use Argentina “no longer just as a strategic route for drug smuggling and money laundering activities, but also for several stages of drug manufacture ... preparation and conditioning of significantly sized shipments.”

The cocaine seized in Mexico, in fact, left Bolivia as coca paste and was processed into cocaine in Argentina. The operation involved several stages, leading to charges against six people. Argentine businessmen were among those accused of working with Cesar Cornejo, a Mexican industrial engineer suspected of ties to Mexico’s Sinaloa cartel. Arroyo said multinational groups are setting up in Argentina as seemingly legal entities, hiring professionals such as accountants, engineers, chemists and customs agents. The seizure at the Mexican port, for one, was carried out “with the help or acquiescence of import-export companies, both national and international” and heavy financial and logistical backing, she said.

In Argentina, there is little consensus over how to keep the country from falling further into the hands of drug dealers. Officials and experts debate ideas as diverse as deploying the armed forces, as Brazil has done; following Bolivia’s lead of shooting down suspicious planes; or trying Uruguay’s experiment with decriminalising drugs for personal use.

Argentine Security Chief Sergio Berni recently acknowledged that “with our laws and judicial system, we are facilitating (the traffickers’) actions.”

And, while the extent of the problem in Argentina has not reached the levels that disrupted Colombia years ago or is now plaguing Mexico, Argentines fear what may come.

A recent statement from the country’s Catholic bishops urged authorities to choose a course of action before it is too late. If political and social leaders fail to act urgently, they said, Argentina “runs the risk of passing a point of no return.”