By: Benjamin Katzeff Silberstein
A few updates on the food situation:
Overall, prices continue to rise, as reported by several outlets. A recent article in Rimjingang reports that fuel prices are in fact double what they were last year this time. Fuel prices are highly sensitive to import conditions, suggesting that getting fuel and oil into North Korea remains relatively difficult:
The international price of fuel rose steadily worldwide due to Russia’s invasion of Ukraine in February 2022; however, it began falling in June of last year. South Korean gasoline prices, for example, have fallen by KRW 558.
Why, then, are North Korea’s market prices for fuel still rising? A reporting partner in the northern part of the country told ASIAPRESS that “it is because the authorities have drastically limited the amount (of fuel) circulating in the market,” further explaining that:
“Supplies of fuel are under state control, but state-run fuel supply depots have sold fuel into markets, allowing anyone to buy it. There has also been a lot of corruption in the military and other government agencies, with people siphoning off fuel (where they can). As a result, it’s now become difficult to buy fuel at fuel supply depots. They don’t sell the fuel unless you have haengpyo, which are used by government agencies and enterprises.”
Haengpyo are akin to checks and are used by organizations to pay for goods or services.
Another possible factor is that while North Korean market prices do tend to follow global ones for many goods, they often do so with a significant time lag. This results from the many barriers that disconnect the North Korean economy from the rest of the world, making it react more slowly to global changes than other countries.
I’ve often pointed out that differences in the relative price between corn and rice is one of the most relevant metrics we have access to for assessing North Korea’s food situation. The two main staple foods are, depending on the season and other factors, corn and rice. Corn is generally much cheaper than rice, because rice is the preferred (and therefore more expensive) good. Corn prices increasing in a way that isn’t seasonally normal is, therefore, a possible sign that the overall food supply is decreasing (for more, see this post).
This is precisely what Daily NK reports is happening, and they in fact note the highest rice prices ever recorded in their index (though this does not seem to take inflation into account). Rice prices are going up more than normal for this time of year, and so is demand for corn:
Early March rice prices in North Korea have hit their highest point ever compared to prices surveyed in early March over the past five years, a recent Daily NK survey of commodity prices in North Korea has found. The survey also found that rice prices are not falling by much following last year’s harvest, but demand is rising for corn, a rice alternative.
According to Daily NK’s regular survey of North Korean market prices, a kilogram of rice in Yanggang Province’s city of Hyesan cost KPW 6,300 as of Mar. 5. That is 3.3% higher than two weeks ago on Feb. 19, when it cost KPW 6,100.
In Hyesan, the price of a kilogram of rice rose to KPW 6,300 in late November and began falling from December to KWP 5,620, but has been rising once again since mid-January.
In fact, early March rice prices in North Korea were found to be the highest ever of all Daily NK surveys taken in early March over the past five years.
[…]
In early March 2019, before North Korea shut its borders to prevent the spread of COVID-19, the price of rice in Pyongyang, Sinuiju and Hyesan was KPW 4,200, KWP 4,210 and KPW 4,400, respectively. In early March of this year, it was 38% more expensive in Pyongyang, 42% more expensive in Sinuiju and 30% more expensive in Hyesan.
The current rice prices are even higher than when rice and corn prices spiked following a spate of panic buying of grain after North Korea closed its border in January 2020.
Food prices, of course, vary heavily between regions, partially because domestic transport is so costly and slow:
In early March 2019, before North Korea shut its borders to prevent the spread of COVID-19, the price of rice in Pyongyang, Sinuiju and Hyesan was KPW 4,200, KWP 4,210 and KPW 4,400, respectively. In early March of this year, it was 38% more expensive in Pyongyang, 42% more expensive in Sinuiju and 30% more expensive in Hyesan.
The current rice prices are even higher than when rice and corn prices spiked following a spate of panic buying of grain after North Korea closed its border in January 2020.
In Pyongyang, however, the price of rice has fallen somewhat compared to Daily NK’s survey of prices taken in mid-February. A kilogram of rice in Pyongyang’s markets cost KPW 5,800 as of Mar. 5, 3.3% less than it cost on Feb. 19, when it cost KPW 6,000.
The fall in rice prices in Pyongyang suggests that the city’s residents may have been able to recently purchase grain through state-run food shops.
[…]
Meanwhile, the price of corn in North Korean markets is rising more sharply than the price of rice.
As of Mar. 5, a kilogram of corn in the markets of Pyongyang, Sinuiju and Hyesan cost 6 to 11% more than it did in Daily NK’s survey in February.
A kilogram of corn cost KPW 3,000 in Pyongyang, 11% more than it did on Feb. 19, which essentially means that while demand for rice fell in Pyongyang, demand for corn skyrocketed.
In fact, the price of corn this year is at a five-year high for early March.
This is all happening despite reports that the state has directed its food shops, that usually only operate sporadically, to sell at subsidized prices, with the regime using state supplies to drive down the market price (I spoke with Daily NK about this in a recent interview).
Many question marks remain. My biggest concern about the information that we’re getting right now is regional bias. It’s always an inherent risk in any information coming out of North Korea through grassroots sources. But with border controls tightening so much since the onset of the pandemic, getting information out has become significantly more difficult. With fewer sources — and no one really denies this is the case — single data points from specific regions can carry comparatively larger weight, distorting the overall image.