The United States must give the highest priority to curbing its own demand for illegal drugs if it is going to have any chance of stemming trafficking from Central America, a panel of prominent Western Hemisphere experts said Thursday.

"As long as the profit margin for cocaine is 12,000 percent from production cost to street value, the lure of trafficking will be irresistible," the panel said in a 50-page report. "Primary attention must shift to demand."The report, which contains a series of recommendations for action on hemispheric issues, was prepared by the Inter-American Dialogue, a non-partisan group of 62 noted citizens from the United States, Latin America and Canada.

The commission is chaired by Sol M. Linowitz, a former ambassador to the Organization of American States, and Daniel Oduber, a former president of Costa Rica. Other members include two additional former Latin American presidents and more than a dozen former cabinet members from the United States and Latin America.

The report said efforts to reduce the supply of drugs from Latin America to the United States are bound to be inadequate, and the high profit margin for drug smuggling "will buy all the protection the drug lords need."

The Reagan administration initially concentrated its efforts on stopping drug smuggling at its source but recently has said more attention must be given to reducing demand.

President Reagan said in a speech last February, "as significant as stopping smugglers and pushers is, ending the demand for drugs is how, in the end, we'll win."

According to the report, "Experience has shown time and again that short-term disruptions of drug supplies have little or no long-term effect on drug availability in the United States.

"Eradication programs temporarily succeeded in Mexico and Bolivia and previously in Turkey but failed ultimately to reduce the flood of illegal drugs to the United States. It is all too easy for drug traffickers to shift their sources of supply from country to country and, if necessary, from continent to continent, one step ahead of U.S.-assisted drug enforcement programs."

The report also recommended that the United States help other countries implement their own drug control policies rather than apply pressure and threaten sanctions if these countries do not adopt U.S. prescriptions.

Under U.S. law, the administration is required to impose economic sanctions against countries which do not cooperate in curbing drug flows into the United States.