Archive for the ‘Energy’ Category

DPRK – China Trade in 2015 (UPDATED)

Tuesday, August 11th, 2015

UPDATE 2 (2015-8-17): Marcus Noland weighs in on the H1 2015 KDI report.

UPDATE 1 (2015-8-11): KDI reports that DPRK-China trade continues to fall in 2015. According to Yonhap:

North Korea’s trade with China plunged more than 10 percent in the first five months of 2015 due mainly to a drop in raw material prices, a report showed Tuesday.

North Korea’s outbound shipments to its neighbor sank 10.3 percent on-year to US$954 million in the January-May period, while imports plunged 14.3 percent to $1.09 billion, according to the report by the Korea Development Institute (KDI).

“Bilateral trade was down 12.5 percent compared to the year before with exports of anthracite coal and iron ore affecting overall numbers,” KDI said. “Compared to the year before, when trade fell 4.8 percent, this year’s drop is more pronounced.”

The think tank based its assessment on data provided by the International Monetary Fund, the United Nations and the Korea International Trade Association.

North Korea’s exports of coal to China declined 1.6 percent in dollar terms, with the number for iron ore nosediving 70.3 percent.

Falling exports and a subsequent drop in earnings were probably felt by Pyongyang, which will have to consider other means of generating hard currency.

Compared to 2013, when the North’s exports of coal reached its peak, this year’s numbers represent a 24.6 percent drop.

“The contraction is noteworthy because the North actually diversified the places it shipped coal to in China,” the KDI said.

In regards to iron ore, exports declined, both in terms of volume and prices, with the weakening of China’s steel industry directly impacting trade. Exports stood at 600,000 tons, down from 1.11 million tons, with the value standing at $22.96 million.

The KDI said Pyongyang’s No. 1 import item from its neighbor was filament yarn, followed by cargo trucks and petroleum products. Imports of yarn and petroleum products were down, while shipments of cargo trucks rose.

In bold above I have highlighted what appears to be bad news for North Korean coal exporters. I was surprised to see this because an earlier report by Bloomberg indicated that North Korean coal exports to China had increased by 25% this year (over 2014).  However, it is worth pointing out that the Bloomberg report focuses on the actual quantity of coal crossing the border and KDI  reports on the value of the coal crossing the border. The only way both reports can be true is if the North Koreans are again taking lower prices from the Chinese for their coal compared to their international competitors. Another explanation for the conflicting reports could arise if there was a significant difference between Chinese customs data (Bloomberg) and that used by the International Monetary Fund, the United Nations and the Korea International Trade Association (KDI). I don’t have enough experience with these data sets to know how consistent they are.

Benjamin Katzeff Silberstein offers a link to the report here (in Korean only).

Read the full story here:
N. Korea’s trade with China tumbles this year: KDI
Yonhap
2015-8-11

ORIGINAL POST (2015-4-26): Yonhap reports that DPRK – China trade has fallen in the first quarter of 2015:

Trade between North Korea and China, its economic lifeline, slipped 13.4 percent on-year in the first three months of this year amid frayed bilateral ties, data showed Sunday.

Bilateral trade volume fell to US$1.1 billion in the January-March period, compared with $1.27 billion for the same period last year, the Beijing unit of South’s Korea Trade and Investment Promotion Agency (KOTRA) said, citing Chinese customs data.

China is North Korea’s top economic benefactor, but its political ties with Pyongyang have been strained since the North’s third nuclear test in February 2013.

No crude oil was officially sent to North Korea from China for all of last year.

China’s shipments of crude oil to North Korea were also absent during the first quarter of this year.

South Korean diplomatic sources in Beijing, however, have cautioned against reading too much into the official Chinese trade figures because China has provided crude oil to North Korea in the form of grant aid in the past and such shipments were not recorded on paper.

Read the full story here:
N. Korea’s trade with China dips 13.4 pct in Q1
Yonhap
2015-4-26

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DPRK coal shipments to China 2015

Sunday, July 19th, 2015

Back in 2014, Kevin Stahler argued that the DPRK’s anthracite coal exports were falling due to Chinese environmental and trade policies. This year Bloomberg reports that coal exports are showing heavy growth:

China-DPRK-Anthracite-2015

North Korea was the only country to boost coal shipments to China this year as Vietnamese supply slumped.

Chinese coal imports tumbled 40 percent in the five months through May, according to customs data. North Korean shipments jumped 25 percent, overtaking Mongolia and Russia to become China’s largest foreign source of coal after Australia and Indonesia, as Vietnamese imports dropped 91 percent.

An expanding power sector means Vietnam is preparing next year to start importing coal, ending its role as the world’s biggest supplier of a high-quality grade known as anthracite. North Korea’s benefiting from the rising exports as it needs foreign income amid a three-month drought that’s threatening harvests and raising the possibility that it will need to import food.

“It may be a replacement for the lack of exports from Vietnam,” Guillaume Perret, founder and director at Perret Associates, a coal research company in London, said by phone Friday. “It could be that some power plants or industrial sectors need high-quality anthracite for blending. There’s not so much anthracite in the world, so they may be replacing Vietnamese exports with North Korea.”

Vietnam Shipments

China’s shift to a more consumer-driven economy from heavy industrial investment has damped the nation’s demand for commodities from iron ore to copper. The country imported 7.5 million metric tons of coal from North Korea in January through May as Vietnam’s shipments fell to 180,000 tons and total foreign supplies dropped to 62 million tons. The customs data doesn’t distinguish between grades of thermal coal.

“North Korea is the new No. 1 exporter of anthracite,” Georgi Slavov, head of basic materials research in London at Marex Spectron, said Friday by e-mail. “Vietnam held the No. 1 spot for many years before that.”

Australia and Russia’s coal sales to China dropped as much as 45 percent in the period, while South Africa and the U.S. made no shipments at all in 2015, the customs data show. North Korea produced 43 million short tons (39 million metric tons) of coal in 2012, the last year for which the U.S. Department of Energy has estimates. That’s about 1 percent of Chinese output.

Anthracite in China closed unchanged on July 14 at 604 renminbi ($97.27) a metric ton, according to weekly data from the China National Chemical Information Center. Prices slid 12 percent so far this year.

NK News followed up with a separate story. You can read it here.

Here are comments by Marcus Noland.

Read the full story here:
North Korea Gains in China Coal Exports as Vietnam Bows Out
Bloomberg
Alessandro Vitelli
2015-7-19

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DPRK’s 2015 drought (UPDATED)

Wednesday, July 8th, 2015

Lake-Yonphung-2014-4-7

Lake-Yonphung-2014-9-12

Pictured above in Google Earth: (Top) Lake Yongphung 2014-4-7 (Bottom) Lake Yongphung 2014-9-12

UPDATE 27 (2015-8-13): Reliefweb reports CERF aid to the DPRK for drought relief:

Central Emergency Response Fund allocates US$6.3 million for Drought Response in DPR Korea

A long period of abnormally dry weather affecting DPR Korea has resulted in drought, impacting agricultural production, reducing access to water and leading to a deterioration of health, nutrition and sanitary conditions. Approximately 18 million people, dependent on Public Distribution System rations are affected and at risk of food insecurity, malnutrition and waterborne diseases.

As the United Nations and humanitarian partners step up their support to national relief efforts in the lead up to the peak of the lean season, US$6.3 million was allocated from the Central Emergency Response Fund (CERF) to respond to urgent needs. This funding enables UN agencies to rapidly scale up response operations and provide 1.3 million people, including 790,000 women and children, with life-saving assistance in four of the most affected provinces of South Hwanghae, North Hwanghae, South Pyongan and South Hamgyong.

“The availability of CERF funds allows us to kick-start life-saving response to communities affected by drought”, said the United Nations Resident Coordinator to the DPR Korea, Mr. Tapan Mishra. “The critical funds will help reduce incidence of diarrhoea and other non-communicable diseases, caused by a lack of access to safe water. The funds will also be used to combat malnutrition exacerbated by a lack of access to food, water and the increase incidence of waterborne diseases.”

CERF funds are insufficient to meet the urgent needs of all the affected communities, particularly where chronic humanitarian needs are exacerbated by the drought. DPR Korea remains critically underfunded, with only 36 per cent of funding received for humanitarian programmes in 2015.

“Additional funding sources continue to be urgently required as humanitarian operations in DPR Korea remain underfunded,” emphasized Mr. Mishra. “Humanitarian and political issues must be kept separate in order to ensure we can respond to the needs of the most vulnerable, especially women and children.”

Xinhua also reported on this (2015-8-19):

The UN Central Emergency Response Fund (CERF) has 6.3 million U.S. dollars for drought response in the Democratic People’s Republic of Korea (DPRK), and UN agencies and humanitarian partners are stepping up their support to national relief efforts in the lead up to the peak of the lean season, a UN spokesperson told reporters here Tuesday.

“The resident and humanitarian coordinator for the DPRK, Tapan Mishra, said that a long period of abnormally dry weather affecting the country has resulted in drought, impacting agricultural production, reducing access to water and leading to a deterioration of health, nutrition and sanitary conditions,” UN associate spokesperson Vannina Maestracci said at a daily news briefing.

“An estimated 18 million people, dependent on Public Distribution System rations, have been affected and are at risk of food insecurity, malnutrition and waterborne diseases,” she said.

Rainfall figures and information from humanitarian agencies and the government indicated that parts of the DPRK are already facing serious drought. North Hwanghae, South Hamgyong and South Hwanghae are most affected provinces by the decline in rainfall, the UN Children’s Fund (UNICEF) said in early July.

UNICEF officials have recently met with local health officials in affected provinces who confirm reports of significant increases in diarrhea among children, as the absence of rain threatens access to safe water and sanitation.

“Lack of rain reduces access to clean water and undermines effective hygiene, putting children’s lives at risk,” said UNICEF Regional Director Daniel Toole. “The UNICEF has already received reports that the incidence of diarrhea, globally a leading cause of death among young children — has increased seriously in the first six months of 2015 in the drought-affected provinces.”

The UNICEF has released prepositioned emergency supplies to help those in the worst-affected provinces, including water purification tablets, water storage containers and health supplies for children with severe acute malnutrition. Training on how to treat children with severe acute malnutrition has also been stepped up.

The UN agency will take time to ensure life-saving water. Hygiene, medical supplies, and the expertise to use them, are available at the levels required should the drought continue.

The drought-affected provinces are key sources of DPRK staple food crops. The UNICEF warned if the main harvest fails in those provinces food may become scarce across the country, which could dramatically increase the numbers of children at serious risk.

An earlier report indicated that CERF had delivered US$2m to the DPRK in the first half of 2015. According to VOA (2015-1-26):

U.N. humanitarian chief Valerie Amos has allocated about $100 million from the Central Emergency Response Fund (CERF) to boost relief work in 12 countries, including North Korea.

But only about $2 million will be given to the communist country for the first half of this year, a 70 percent plunge from the beginning of last year.

The decrease comes as the need for emergency assistance has risen sharply in Syria and surrounding countries.

UPDATE 26 (2015-8-11): Reliefweb (UN Office for the Coordination of Humanitarian Affairs) has published an update on the status of the 2015 drought:

For the last eighteen months, a long period of abnormally dry weather has affected DPR Korea (DPRK) affecting agricultural production, reducing access to water and leading to a deterioration of health, nutrition and sanitary conditions.

According to official meteorological data, all provinces in DPRK have experienced less rainfall than the average, however the difference in the level of rainfall was most severe in May and June. In May 2015, total rainfall was 57% below the average. A partial failure of the early harvest of 18% is expected. If weather conditions persist, the main crop harvest (September/October) is also likely to be severely impacted.

Provinces produce specific crops, with some producing more than provincial requirements and some with less. Provinces then import or export depending on their production levels which is then complemented by the Government food ration provided through the Public Distribution System (PDS). As the drought has severely affected the major food producing provinces this has impacted the whole country.

You can download the full report (PDF) here.

UPDATE 25 (2015-7-15): Writing in 38 North, Randall Ireson asks if the drought is over…

After a month of concern, DPRK farmers have received substantial rains in the last few days, which will at the very least break the current drought. Except for Sinuiju on the Chinese border, weather stations in the western farming region have reported between 3.5 and 7.5 inches of rain between July 10 and 14, with similar amounts falling in Kangwon province.

This is very good news, and will provide adequate moisture for the main crops for the immediate future. The next week is expected to be dry, but another smaller weather system is expected over the weekend. If rainfall for the remainder of the year is at or near normal amounts, adverse effects of the recent dry months will be limited. But July rainfall is still less than half of normal, and crops will need substantial rain into August to insure normal development.

Read the full story here.

UPDATE 24 (2015-7-14): According to Marcus Noland:

Well, the rains came and it appears that the worst will be avoided. According to the Ministry of Unification, after May rains only reached 55 percent of their normal levels, precipitation picked up in June, reaching 90 percent of the norm. While the fall harvest may be adversely affected, the normal June-July monsoon type rains are most critical for most crops (see figure 1 of the GIEWS Update if you’re really into it).

This doesn’t mean North Korea is completely out of the woods or some might not suffer. UNICEF is reporting an upsurge in children’s diarrhea, a leading cause of death among children worldwide. According to UNICEF Regional Director Daniel Toole, “Lack of rain reduces access to clean water and undermines effective hygiene, putting children’s lives at risk.” The agency reports increases in childhood diarrhea: a 71 percent increase in North Hwanghae province; a 34 percent increase in South Hamgyong province; and a 140 percent increase in South Hwanghae province for the first six months of the year. As I observed in an earlier post, the sensitivity of the population to such shocks is heightened by the pre-existing poor nutritional status of many children in North Korea.

To make matters worse, the FAO reported last week that authorities had cut the July distributions through the public distribution system (PDS) to “310 grams per person per day, a 25 percent decrease from the previous month. Between January and June 2015, the average food ration was 410 grams per person per day.” This isn’t good news, but not clear how bad this news is either: the PDS had become largely irrelevant for much of the population, particularly the most vulnerable groups which have more or less operated outside of it for 20 years. Nevertheless, even though most North Korean households do not rely on the PDS for most of their consumption needs, a cut in rations does hurt at the margin, and could be propagated throughout the society if those who do get food via the PDS turn to the market, putting upward pressure on prices there.

UPDATE 23 (2015-7-10): In an IFES report, the DPRK asserts that food production has increased over the last few years due to agricultural adjustment policies like the 6.28 Measures or the 5.30 Measures.

Despite Drought Last Year, Food Production Increased Due to Field Responsibility System

North Korea experienced its biggest drought in 100 years last year. However, North Korea claims that this did not affect its food production. North Korean authorities are claiming the main factor behind the increased food production is the will of farmers to produce more after the expansion of the “field management system,” or pojon tamdangje.

In an interview with the weekly newspaper, Tongil Sinbo, Chi Myong Su, director of the Agricultural Research Institute of the Academy of Agricultural Sciences of the DPRK commented, “the effectiveness of field management system (pojon) from cooperative farm production unit system (bunjo) is noticeable and succeeded in increasing grain production despite the adverse weather conditions.”

The field management system under the bunjo management system or the subworkteam management system divides the work unit consisting of 10-25 people into smaller units of 3-5 people, responsible for farming a smaller unit of a field. This is a measure to increase the “responsibility and ownership of farmers.”

From the July 1st Economic Management Improvement Measures enforced in 2002, the autonomy of cooperative farms and enterprises expanded. The “field management system” was piloted from early 2004 in Suan, North Hwanghae Province and Hoeryong, North Hamgyong Province, but was suspended soon afterward. However, this system is reported to have been implemented widely after the first National Conference of Subworkteam Leaders in the Agricultural Sector was held in Pyongyang in February 2014.

Economic principles behind the field responsibility system are stated as, “under the sub-work team structure, a smaller subworkteam consisting of 2 to 3 families or 3 to 4 people depending on the scale and means of production, is responsible for a specific field or plot (pojon) from planting to harvest stage to inspire farmers with enthusiasm for production by distributing the shares of production in accordance with the output of production planning.”

The newspaper added, “Despite the adverse weather conditions last year, the high grain yield was possible due to implementation of scientific farming methods and field management system to increase enthusiasm of farmers,” and “based on this experience, many cooperative farms across the country will expand subworkteam management system to field management system.”

Director Chi stated, “Since the field management system was implemented, farmers’ labor capacity increased to 95 percent. The planting time for corn and rice that took 20 to 30 days in the past is shortened to 10 to 15 days. In the autumn season, grain threshing that took 50 days is now only taking 10 days. This is changing the farming landscape.”

In addition, the distribution shares for farmers increased as well as the state’s procurement last year. This is attributed to “socialist distribution principles that distributed grains produced to farmers in-kind based on their efforts after excluding a specified amount of grain procured by the state.”

He added, “There are quite a number of farming households that received several decades worth of distribution after a year of farming. There is an increasing number of families with growing patriotism to increase the amount of grain procurement to the state.”

UPDATE 22 (2015-7-10): The South Korean Ministry of Unification reports that the drought has eased. According to Yonhap:

The Unification Ministry said Friday that a severe drought that hit North Korea appears to have considerably eased since June as rainfall has almost reached last year’s level in many areas.

North Korea has been grappling with what it called the worst drought in 100 years, sparking concerns about food shortages. South Korea earlier predicted that the North’s crop production could fall by as much as 20 percent if the lack of rain continues into early July.

The ministry said the dry spell seems to have eased in North Korea though several areas in the northeast and midwest provinces are still suffering from the drought.

“North Korea had suffered from severe drought across the nation until May. But it seemed that since July, the situation has considerably eased,” Jeong Joon-hee, ministry spokesman, said in a press briefing.

“But some provinces such as Hwanghae and Hamgyeong provinces are still grappling with prolonged drought, which warrants a close watch,” he added.

The ministry said that the average precipitation in May reached 54.5 percent of that recorded a year earlier. But in June, the rainfall increased to hit almost 90 percent of the level recorded in the same period last year.

Seoul earlier said that it is willing to provide support for North Korea in coping with the drought if the country makes a formal request. There has been no request from Pyongyang.

“Currently, the South government is not considering providing food aid to the North,” said a ministry official, asking not to be named.

UPDATE 21 (2015-7-10): VOA reports that food rations have been cut:

Drought-hit North Korea has reduced food distribution, an official of the U.N. Food and Agriculture Organization (FAO) said Thursday.

Cristina Coslet, FAO’s Global Information and Early Warning System officer in charge of Far East Asia, told VOA the North Korean government informed the agency that the country’s food ration for July was 310 grams per person per day, a 25 percent decrease from the previous month. Between January and June 2015, the average food ration was 410 grams per person per day.

Coslet said a severe drought is affecting the country’s crop production.

“We assume that this is mainly because early planted crops – wheat, barley, potato – decreased considerably,” said Coslet in a phone interview with VOA.

Coslet expected this year’s production of potatoes and winter wheat to drop by more than 20 percent from the previous year.

The FAO official said the early season harvest is relatively small, but it is an important food source for North Koreans.

“Spring crops are vital for food security, being an important food source for the lean season, which stretches from May to September,” said Coslet.

Coslet added, however, that it is still too early to estimate the final harvest, as rainfall in the coming weeks is crucial.

Despite the dismal forecast, the communist country is not known to have sought food assistance from U.N. agencies or Western countries.

UPDATE 20 (2015-7-9): Stephan Haggard offers analysis here.

UPDATE 19 (2015-7-9): UNICEF is worried about the impact of drought. According to the AFP:

A serious drought in North Korea requires urgent action to prevent the deaths of children already weakened by widespread malnutrition, the U.N. children’s fund, UNICEF, warned Thursday.

“The situation is urgent. But if we act now — by providing urgently needed expertise and pre-positioning supplies — we can save lives,” said UNICEF East Asia Regional Director Daniel Toole.

“If we delay until we are certain of crop failures, it may well be too late to save the most vulnerable children,” Toole said in a statement.

North Korea is currently suffering what its official media described last month as the “worst drought in 100 years.” It has severely impacted main rice-growing areas.

According to the U.N. World Food Program, early-harvest crops, mainly wheat and barley, have already been affected.

UNICEF said its personnel had recently met with local health officials in affected provinces who confirmed reports of significant increases in diarrhoea among children.

“Lack of rain reduces access to clean water and undermines effective hygiene, putting children’s lives at risk,” Toole said.

Concern about the impact of the drought is heightened by the existing poor nutritional status of many children in North Korea.

A 2012 study showed one-quarter of all North Korean children had symptoms of chronic malnutrition — a condition usually caused by a combination of unsafe water and poor sanitation, low food intake, and inadequate access to health services.

Toole said responding to the current drought crisis was difficult given North Korea’s isolation and the lack of funding for children-focused programs in the country.

But UNICEF has released pre-positioned emergency supplies to help those in the worst-affected provinces, including water purification tablets, water storage containers and health supplies for children with acute malnutrition.

UPDATE 18 (2015-7-9): A visitor to North Korea has sent this third drought poster. This poster was never published in Rodong Sinmun or KCNA. I have worked to translate it as best as possible, but still not quite there:

z2015-Drought-poster-3z

물절약형농법=An Agricultural Methods to Save Water
밍른봉 얕은갈이=Shallow tillage in early spring
영양알모재배 (?)=Cultivation methodology?
물원전학보관리 (?)=Management of water resources?
간단물대기=Simple irrigation
농업생산에서 일대 전환을!=A complete change/shift through agricultural production!

UPDATE 17 (2015-7-3): Associated Press covers drought in Unpha.

UPDATE 16 (2015-7-1): UN OCHA posts this document on the drought.

UPDATE 15 (2016-6-26): Associated Press covers drought in Hwangju County:

The protracted drought is heightening worries about North Korea’s ability to feed its people. Two-thirds of North Korea’s 24 million people faced chronic food shortages, the United Nations said earlier this month while asking donors for $198 million in humanitarian aid for the country.

Even in South Phyongan and North and South Hwanghae provinces, which are traditionally North Korea’s “breadbasket,” thousands of hectares (acres) of crops are withering away despite good irrigation systems, local officials said.

Reservoirs are drying up, creating irrigation problems for farmers, said Ri Sun Pom, chairman of the Rural Economy Committee of Hwangju County.

A group of female soldiers with yellow towels tied around their heads fanned out across a farm in Kohyon-ri, Hwangju county, North Hwanghae province, with buckets to help water the fields. An ox pulled a cart loaded with a barrel of water while fire engines and oil tankers were mobilized to help transport water.

The North Korean villages of Kohyon-ri and Ryongchon-ri were among several areas that journalists from The Associated Press visited in recent days.

Pak Tok Gwan, management board chairman of the Ryongchon Cooperative Farm in North Korea, said late last week that the farm could lose half its corn without early rain.

Mountainous North Korea, where less than 20 percent of the land is arable, has relied on outside food aid to help make up for a chronic shortage since natural disasters and outmoded agricultural practices led to a famine in the 1990s. North Korean farmers still face shortages of fuel, tractors, quality seeds and fertilizer, the U.N. said in a report earlier this month. Many irrigation systems rely on electrically powered pumping stations in a country with unstable power supplies, the report noted.

On Tuesday, North Korean state media reported record-high temperatures in Pyongyang and other cities in the southwest.

UPDATE 14 (2015-6-25): Yonhap offers a comprehensive story on the drought:

N. Korea claims worst drought in 100 years

SEOUL (Yonhap) — North Korea has claimed again it is suffering from the worst drought in 100 years, while some foreign experts expressed skepticism, saying that the North may be exaggerating the situation in hopes of getting international aid.

The (North) Korean Central News Agency (KCNA) said on June 16 the worst drought in 100 years continues in the country, causing great damage to its agricultural fields.

The KCNA said rice-transplanting has been finished in more than 441,560 hectares of paddies across the country as of June 8, but at least 136,200 hectares of them are becoming parched.

The granaries in North and South Hwanghae provinces and South Pyongan and South Hamgyong provinces have been badly damaged, it claimed.

“Drought dries up rice-seedlings in nearly 80 percent and 58 percent of paddy fields in South and North Hwanghae provinces,” the North’s mouthpiece said, adding that the water level of reservoirs is at its lowest, while rivers and streams are getting dry.

North Korea experts expect the country’s grain production this year to drop substantially if the drought continues through July, which could deal a further blow to its chronic food shortage problem.

A severe drought may reduce North Korea’s rice harvest by 12 percent this year from a year earlier, a report by the Food and Agriculture Organization of the U.N. showed on June 20, warning of the worsening food shortage in the impoverished country.

The latest FAO report put North Korea’s rice production at an estimated 2.3 million tons for this year, compared with the country’s rice harvest of 2.6 million tons a year earlier.

The estimated production may be less than the average amount of rice produced annually over the past five years, it added.

About one-fourth of North Korea’s total 544,000 hectares of rice paddies are being affected by the drought, the report also noted.

The drought may also eat into the country’s production of double crop products, like potatoes, wheat and barley, according to the report, which put the estimated amount at 277,000 tons this year.

North Korea’s North Hwanghae Province, which accounts for a majority of crop production, is sustaining severe damage from the drought, the report said.

North Korea is also reported to be suffering from severe electricity shortages as power generation in hydro power plants, which account for more than 60 percent of the North’s electricity generation, has been hit hard by the drought.

Reuters reported on May 30 that many hydro power plants in North Korea have suspended operation, reducing the nation’s power generation by half.

According to the U.S. Energy Information Agency, North Korea’s electricity generation stood at 19 billion kilowatts in 2012, less than 5 percent of South Korea’s electricity generation in the same year.

There are also reports that North Korea’s claim of the “worst drought in 100 years” was exaggerated.

The drought now gripping North Korea is not yet a “catastrophe,” a U.S. agricultural expert said on June 18, suggesting that the socialist country may be exaggerating the situation.

The report came days after the South’s unification ministry forecast that the North’s grain production will likely drop by up to 20 percent this year from 2014 if a shortage of rainfall continues until early July.

“We need to be a bit cautious before anticipating a new disaster,” said Randall Ireson in an article carried by the website 38 North, citing previous examples in which the North warned of a disaster, but the situation later improved.

“Early last year, the DPRK government also warned about a drought crisis, but later rains allowed a recovery — while rice production fell about 10 percent from 2013, maize production hit a new high,” he said.

In 2012, the North also claimed another “worst drought in a century,” but ultimately a harvest of 4.92 million tons of grain equivalent, which is consistent with the surrounding years, ensued, the expert said.

“The KCNA article claims that no rain has fallen in South and North Hwanghae provinces. That is hyperbole,” he said, adding that precipitation data show a total of 181 millimeters at Haeju and 102 mm at Sariwon since March.

“While substantially below the historical average (330 mm for Haeju, unavailable at Sariwon), it is hardly ‘no rain,'” he said.

Rain has also fallen in the last few days in what could be the beginning of an annual monsoon season, he said.

“So while one has a right to be concerned, it’s not yet a catastrophe. If the rains of the last few days presage the arrival of the monsoon, then all may turn out fine. If there’s no change in the next couple of weeks, then we should start to worry,” he said.

The U.S. State Department also has ruled out a plan to give aid to North Korea in relation with the current drought.

The Voice of America reported on June 3, quoting a department spokesman, that the department has no plan to offer aid to North Korea at present and North Korea has not asked the U.S. for help yet.

Meanwhile, South Korea said it is ready to support North Korea, Seoul’s pointman on inter-Korean affairs has said.

Unification Minister Hong Yong-pyo said on June 24 that Seoul is willing to offer the necessary support to the North if the North’s situation deteriorates, but added that the South will wait for Pyongyang’s request.

“At a time when the two Koreas are coping with drought, I think that this situation can be a chance to promote cooperation,” Hong said in a meeting with a group of reporters. “If North Korea faces tougher situations, South Korea is willing to provide the necessary support to North Korea.”

He did not elaborate on the kinds of support.

Seoul, however, does not have any immediate plans to make such a proposal to the North pre-emptively, he said, hinting that Seoul needs Pyongyang’s request for help.

“The South is carefully reviewing how to approach this matter,” he added.

In 2014, the North reported its lowest amount of rainfall in 15 years and the United Nations has warned that North Korea is likely to suffer from serious food shortages this year.

The North has relied on international handouts since 1995 to help feed its people in the face of chronic food shortages.

A U.N. report showed that about 70 percent of North Korea’s 24.6 million people suffer from food shortages and 1.8 million, including children and pregnant women, are in need of nutrition.

Meanwhile, Hong expressed regret over the North’s boycott of the upcoming Summer Universiade in South Korea due to political reasons, saying that the sports competition could be a good chance for dialogue.

The North issued a rare statement on June 15 that it is ready to hold dialogue with Seoul if certain conditions are met, including the suspension of the South’s joint military drills with the United States. North Korea, however, took tough measures less than 10 days after the dialogue proposal, including the boycott of the Universiade and sentencing two South Koreans it has detained to lifetime compulsory labor, accusing them of spying for South Korea’s intelligence agency.

UPDATE 13 (2015-6-23): Associated Press publishes images of drought in Nampho.

UPDATE 12 (2015-6-22): Anna Fifield reports in the Washington Post that the chances of a famine returning are slim.

UPDATE 11 (2015-6-22): Marcus Noland offers analysis here.

UPDATE 10 (2015-6-20): Drought may cut N. Korea’s 2015 rice harvest by 12 pct: FAO. According to Yonhap:

A severe drought may reduce North Korea’s rice harvest by 12 percent this year from a year earlier, a report by the Food and Agriculture Organization of the U.N. showed Saturday, warning of the worsening food shortage in the communist country.

The recent FAO report put North Korea’s rice production at an estimated 2.3 million tons for this year, compared with the country’s rice harvest of 2.6 million tons a year earlier.

The estimated production may be less than the average amount of rice produced annually over the past five years, it added.

About one-fourth of North Korea’s total 544,000 hectares of rice paddies are being affected by the drought, the report also noted.

The drought may also eat into the country’s production of double crop products, like potato, wheat and barley, according to the report, which put the estimated amount to 277,000 tons this year.

North Korea’s North Hwanghae province, which accounts for a majority of crop production, is sustaining severe damage from the drought, the report said.

UPDATE 9 (2015-6-19): The Daily NK is reporting in an article price information that is different than its exchange rate/rice price table. Here is a small table that shows the difference:

DailyNK-price-discrepancy-2015-6-19

The exchange rate and rice price differences are not all that significant, and could be related to variations in when they were collected. However, the article text implies that potatoes are the only crop seeing more significant price increases at the moment (and only in Hyesan):

 

According to an inside source, the cost of potatoes in Yangkang Province’s Hyesan Agricultural Market is approximately 2,000 KPW per kg. This represents a massive 1,300 KPW rise when compared to last year’s prices. It’s quite rare to see the cost of potatoes shoot up to the 2,000 KPW mark. This has sent residents into a minor panic. For the same price, it would have been possible to buy about three times as many potatoes this same time last year. This is putting a strain on many residents’ ability to put together a nutritious meal. At the Hyesan jangmadang, corn is selling for 1,800 KPW per kg. Next to that figure, it’s plain to see that the relative cost of potatoes is exorbitantly high. Residents can protest, but at the end of the day, they don’t have any better options.

The article lists other prices, but does not explain any price changes, so I do not know if they have significnatly increased:

Moving along, the cost of 1 kg of corn was 2,400 KPW in Pyongyang and Sinuiju and 2,600 KPW in Hyesan. One kg of pork was selling at 14,000 KPW in Pyongyang, 14,300 KPW in Sinuiju, and 15,000 KPW in Hyesan. Gasoline was trading at 9,450 KPW per kg in Pyongyang and Sinuiju and at 8,450 KPW per kg in Hyesan. Finally, 1 kg of diesel fuel was selling at 5,100 KPW in Pyongyang and 5,200 KPW in Sinuiju and Hyesan. This has been a weekly rundown on North Korea’s latest market prices.

And if you noticed in the above two quotes, the article gives two prices for the price of corn in Hyesan (1,800 and 2,600), so I am not sure what to make of that.

UPDATE 8 (2015-6-18): Marcus Noland offers analysis here and here.

UPDATE 7 (2015-6-18): China Says it is willing to help drought-hit North Korea (Reuters):

China’s Foreign Ministry said on Thursday that the government was willing to help drought-stricken North Korea, after the isolated country said it was suffering its worst drought in a century.

“Our sympathy goes out to the People’s Republic of Korea that is suffering from extremely serious drought, and it is our hope that the government and people will overcome the disaster as soon as possible,” spokesman Lu Kang told a daily news briefing, using North Korea’s official name.

“China is willing to provide the aid that is needed by the Democratic People’s Republic of Korea,” he added, without providing details.

The US says it has no plans to assist the DPRK in the event of a drought. According to Yonhap:

The United States said Wednesday it has no plans to provide food aid to North Korea amid concern food shortages in the impoverished communist nation could significantly worsen due to what the country calls the worst drought in a century.

“I’ve seen the reports about the drought. I don’t have any specific information about the validity of the drought,” U.S. State Department spokesman John Kirby said at a regular briefing in response to a question about the North’s report.

Asked if the U.S. would consider providing food aid, Kirby said, “I’m not aware of any such plans. No.”

UPDATE 6 (2015-6-18): In 38 North, Randall Ireson reports we should take a care when assessing the impact of North Korea’s drought.

The KCNA article claims that no rain has fallen in South and North Hwanghae provinces. That is hyperbole. Precipitation data show a total of 181 mm at Haeju and 102 mm at Sariwon since March. While substantially below the historical average (330 mm for Haeju, unavailable at Sariwon), it is hardly “no rain.” In both locations there were substantial rains in the last several days (61 mm in Haeju, 48 mm in Sariwon). Other locations show a similar pattern of sharply lower rainfall than average, but a recent uptick: Pyongyang has had 143 mm since March, 27 mm in the last week, compared to a March-June average of 230 mm. Anju reported 202 mm since March, 78 mm last week, against a March-June average of 320 mm.[7] So while one has a right to be concerned, it’s not yet a catastrophe. If the rains of the last few days presage the arrival of the monsoon, then all may turn out fine. If there’s no change in the next couple of weeks, then we should start to worry.

Read the full report here.

UPDATE 5 (2015-6-18): The Daily NK reports that the price of rice is basically constant in Pyongyang and Sinuiju this year, though the price shows significant variation in Hyesan:

 Daily-NK-2015-food-prices

UPDATE 4 (2015-6-16): KCNA reports drought this year:

The worst drought in 100 years continues in the DPRK, causing great damage to its agricultural field.

According to data available, rice-transplanting has been finished in over 441 560 hectares of paddy fields across the country as of June 8, but at least 136 200 hectares of them are parching up.

The granaries including North and South Hwanghae provinces and South Phyongan and South Hamgyong provinces have been badly damaged.

Drought dries up rice-seedlings in nearly 80 percent and 58 percent of paddy fields in South and North Hwanghae provinces.

According to the State Hydro-meteorological Administration, no rainfall has been witnessed in North and South Hwanghae provinces.

Water level of reservoirs stands at the lowest, while rivers and streams getting dry.

Other crops are planted in paddy fields of drought-stricken areas as part of the campaign to reduce damage.

UPDATE 3 (2015-6-11): WFP on standby for possible N. Korea drought. According to Yonhap:

The United Nations food agency is closely monitoring the weather conditions in North Korea in order to send emergency assistance there in case of a protracted dry spell, the agency’s regional director in Asia said Wednesday.

South Korea said a day earlier that food production in North Korea may fall by 20 percent on-year if the current drought continues until early July.

“The concern is going to grow week by week until we get closer to the traditional July harvest,” David Kaatrud of the World Food Program (WFP) told Yonhap News Agency in an interview. “So our role is to not only be vigilant … but also stand ready should assistance be required to change our operation toward relief related to any type of food insecurity.”

Last month, North Korea received less than 60 percent of the average monthly rainfall recorded between 1981 and 2010. Precipitation reached a 15-year low last year, with the U.N. warning of severe food shortages should the dry weather there continue.

The WFP has mainly focused on providing nutrition to the most vulnerable, or about 2.4 million children and women, for the past two years.

It recently extended the two-year project, slated to end this month, through the end of 2015.

“We need enough time to refine the intervention we’re doing now,” he said. “The broad contours of what we will be doing next would be very similar to what you see now — it will continue to be focused on a targeted nutrition intervention because that’s what’s required there.”

He reiterated that the WFP was ready to shift its targeted intervention to a more widespread one in case of a severe food crisis.

“But we don’t have any indications (of that) yet,” he said.

The North has relied on international assistance since 1995 to help feed its people in the face of chronic food shortages.

About 70 percent of its people lack food and 1.8 million, including children and pregnant women, are malnourished, according to U.N. data.

The WFP is the U.N.’s largest humanitarian aid arm, accounting for more than 60 percent of the world’s food assistance.

South Korea’s contributions to WFP operations globally reached US$31 million last year.

The two sides held their first annual consultations Wednesday, cementing their commitment for the Zero Hunger Challenge pioneered by U.N. Secretary-General Ban Ki-moon. The challenge aims to ensure that every person has a right to adequate food.

UPDATE 2 (2015-6-9): N. Korea’s crop production may fall 20% in drought. According to Yonhap:

North Korea is likely to see its food production fall by up to 20 percent this year from 2014 if a shortage of rainfall continues until early July, a Unification Ministry official said Tuesday.

In May, precipitation in North Korea reached 57 percent of the average rainfall recorded between 1981 and 2010, according to the official.

In 2014, the North reported its smallest rainfall in 15 years and the United Nations has warned that North Korea is likely to suffer from serious food shortages this year due to drought.

North Korea’s crop production could decline by 15 to 20 percent this year compared to last year if it continues to see a rainfall shortage until early July, the official said.

The North is expected to see its food production fall by only 5 to 10 percent if the lack of rainfall continues into early June. In that case, North Korea is believed to be focusing on producing maize as an alternative to rice.

“This year, the supply of fertilizer is not smooth, compared with last year,” said the official, asking not to be named.

The North has relied on international handouts since 1995 to help feed its people in the face of chronic food shortages.

A U.N. report showed that about 70 percent of North Korea’s 24.6 million people suffer from food shortages and 1.8 million, including children and pregnant women, are in need of nutrition.

Last year, the North suffered from a severe drought in the spring, but managed to produce crops at a level similar to that of 2013 due mainly to the use of preserved water.

The official said that the North’s agricultural reforms might have helped it maintain the food production last year, but this year’s situation may bode ill, given that fertilizer availability is worse.

In 2012, the North announced the so-called “6.28 measures” that centered on allowing farmers to keep 30 percent of their production quota plus any excess over the quota. Last year, it unveiled a new set of reforms that call for raising the farmers’ portion to 60 percent.

UPDATE 1 (2015-6-3): KCNA reports that two posters have been produced to instruct/motivate people to overcome hardships brought on by drought:

KCNA-2015-6-3-Drought-posters

According to Anna Fifield at the Washington Post, the posters say  “Everybody fight against the drought!” and “Let’s all fight powerfully against the drought!”.

ORIGINAL POST (2015-5-31): On 2015-5-11 I reported in Radio Free Asia that many of North Korea’s reservoirs have shown a fall in water levels from 2012 to 2014. This was more evidence of a drought that had struck the country in 2014, and that if it continued, it could affect food and electricity production.

On May 30, Reuters reports that the UN is warning of another drought:

A drought in North Korea could lead to huge food shortages this year, the top U.N. official in the country told Reuters in an interview.

Rainfall in 2014, the lowest in records going back 30 years, was 40-60 percent below 2013 levels, and reservoirs are very low, said Ghulam Isaczai, the U.N. resident coordinator.

“We’re extremely concerned with the impact of drought which will affect the crop this year severely. And we might be faced with another major incident of food availability or even hunger,” said Isaczai. “It is going to create a huge deficit between the needs and what is available.”

If El Nino weather conditions bring more drought this year, the situation in 2016 could be even worse, he warned.

“This is currently the rice-planting season. Normally they submerge the land almost a week or two in advance. But this year, I’ve seen it myself – they’re doing it in the dry, actually planting rice. So what we’re hearing right now is that they’re switching to maize and corn because that requires less water.”

Some farmers, already struggling with a shortage of fuel and equipment, have resorted to using buckets to water seedlings, he said. The effect of North Korea’s lack of agricultural infrastructure such as irrigation systems was visible on the border, where “dry and harsh” North Korean land met green fields in China.

A famine in the 1990s killed as many as 1 million North Koreans but recently many international donors have been reluctant to help because of Pyongyang’s restrictions on humanitarian workers and international concerns over its nuclear ambitions.

“Let’s not make aid political,” Isaczai said.

ELECTRICITY HIT

The United Nations provides nutritional supplements to schools and hospitals but does not have the funds to supply rice for North Korea’s 24.6 million population, 70 percent of whom are already classed as “food insecure”.

“How are they going to fill this gap? I think they have reached out to some countries – to India, to China, to Russia,” Isaczai said.

The lack of water has dried up rivers and streams and has also hit electricity supply, which was at its worst in winter when hydroelectric power was restricted to reserve water for the rice-planting season.

“What the government confirmed to me is that they’re operating at 50 percent of capacity in terms of power generation. A lot of it is now related to water,” the U.N. official added.

Blackouts in Pyongyang last anything from 8-9 hours to a whole 24 hours and many hospitals are unable to operate.

Isaczai said he thought the food situation would not be as bad as in previous major droughts, since communities were now more resilient and might have some reserves.

New farming rules – which allow smaller, family-sized teams to run farms – meant more efficiency and ownership, he said, with families allowed to keep livestock and farmers able to keep surplus crops.

“Also there are small markets emerging in rural areas, like kind of farmers’ markets where people can barter or trade or sell things.”

Some people were also selling food on the street, which might be a few eggs or apples, enabling families to supplement the food they get from the national ration system.

The reforms may not be fast or widespread, Isaczai said, and the impact may take three to five years to be felt.

The government also set a target last year of building 20,000 greenhouses, he said, which would make more vegetables available and diversify diets, but the country needs help to build them.

Read the full story here:
U.N. warns of coming hunger in North Korea
Reuters
Tom Miles
2015-5-30

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Mongolian mining firm to export coal from Rason

Friday, June 19th, 2015

According to the Reuters:

A Mongolian coal miner has signed a deal with a shipping company to deliver its coal via Russia to North Korea’s Rason port, part of the landlocked north Asian nation’s efforts to find new ways to reach overseas markets such as Japan and South Korea.

Miner Sharyn Gol signed a binding agreement on Friday with Mongol Sammok Logistics to ship its coal to Rason, where Mongolia already has an agreement with North Korea that gives its exporters preferential treatment at the port.

Mongolia currently ships the bulk of its mostly resource-based exports to China, leaving its economy dependent on its powerful southern neighbour and putting it at a disadvantage when it comes to negotiating prices.

“This is a pretty historic deal,” said James Passin, who controls Mongolian Stock Exchange-listed Sharyn Gol through the New York-based Firebird Mongolia Fund.

“This deal has to be viewed in the context of international relations and diplomacy,” he told Reuters on the sidelines of a signing ceremony.

Sharyn Gol currently has no sales agreements in place with any potential overseas buyers, Mr. Passin said, adding that he could not disclose any further details.

Mr. Passin declined to reveal any estimated delivery cost for shipments from the Sharyn Gol mine to Rason, but pointed to the preferential treatment at the port and the Russia exports that already go through there to South Korea.

South Korea has at least twice in the past year taken deliveries of Russian coal from Rason, with steelmaker POSCO one of the regular buyers, according to a company spokesman.

Namgar Algaa, executive director of the Mongolian Mining Association, said opening up new markets would allow Mongolian miners to manage the risk of slowing Chinese growth.

China’s weakening growth this year has meant its coal imports from Mongolia fell 6.9 percent across the first four months of the year to 5.2 million tonnes.

 

Read the full story here:
Mongolian miner signs deal to ship coal to North Korea
Reuters
2015-6-19

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DPRK looks to boost energy supply

Wednesday, June 3rd, 2015

According to the Associated Press:

North Korea is racing to boost its electricity supply by up to 50 percent with the completion of several generating stations by the end of the year and is pushing alternative resources like solar — already used extensively in the countryside — to ease its chronic shortages, a government expert told the Associated Press in Pyongyang.

In an unusually high-profile campaign, the North has mobilized legions of shock brigades to complete two large hydropower projects by Oct. 10. As is common with major North Korean construction efforts, the deadline is a date of national significance: the 70th anniversary of its ruling party.

Officials hope a noticeable increase will provide tangible proof that the party is working to improve the impoverished and heavily sanctioned nation’s standard of living. Kim Kyong Il, a senior researcher at Pyongyang’s Academy of Social Sciences, said the goal is a 20 to 50 percent increase in power compared with the 2014 level.

How effective its latest ‘‘speed campaign’’ will be is an open question.

Even achieving its target would leave North Korea with a small fraction of what it needs to fuel a vibrant economy or even meet some basic needs of its population. Experts stress the North needs more than just new power stations — it must improve its infrastructure to get the electricity where it is needed, secure spare parts and conduct sustained maintenance to keep the plants themselves going.

Supplying its industries and 24 million citizens with even a bare minimum of electricity has long been one of North Korea’s biggest problems, particularly after the fall of the Soviet Union in the early 1990s. Since then, the international community has offered to help the North expand its power grid, if it agrees to dismantle its nuclear weapons program, but to no avail.

North Korea’s total, nationwide electricity output is believed to be about 15 terawatt hours per year, give or take 10 or 20 percent. That would only be about enough to power Seoul, the South Korean capital of 10 million, for less than four months.

It’s been estimated — though never confirmed by Pyongyang — that about one-fifth of North Korea’s electricity is diverted to its 1 million-person military. Moreover, a disproportionate amount of the nation’s power is used to light up Pyongyang, where less than one-tenth of the population resides.

Kim, the government expert, said the North is shifting its focus in line with leader Kim Jong Un’s promise to improve the lives of the North Korean people and invigorate its economy.

He said North Korea is exploring wind and tidal power sources and added that solar already provides as much as half of the electricity in some rural areas. Small solar panels, seen by outside experts as a grassroots coping mechanism where state-provided energy is woefully lacking, are a common sight on apartment balconies and some countryside farms.

‘‘Our country regards electricity as the engine of the national economy, so the state is increasing investment in this field,’’ he said. He added that a major portion of the 2015 national budget that didn’t go to defense has been earmarked for investment in the power sector, though he refused to give precise figures.

Kim said two major projects — Mount Paektu Songun Youth Power Station units No. 1 and No. 2 and Huichon Power Station units 5, 8, 9 and 10 along the Chongchon River — are expected to be completed in time for the anniversary. The hydropower station on Mount Paektu, near the Chinese border, was started under Kim Jong Un’s father, the late Kim Jong Il, but had been plagued by delays.

State media in the North, officially known as the Democratic People’s Republic of Korea, have portrayed the race to complete the megaprojects as a heroic demonstration of national will.

‘‘The young people of the DPRK have gone through thick and thin in hearty response to the call of the party to flatten even mountains, empty seas and conquer space,’’ the ruling party’s newspaper said in a recent editorial. ‘‘Now is the time for them to powerfully demonstrate their courage, unity and fighting capability before the world.’’

But Kim acknowledged it’s hard to predict how much power the units will actually produce.

‘‘If the power stations now under construction are completed, tens of thousands of kilowatts will be generated,’’ he said. ‘‘But this is only the capacity of the power stations. Actual output differs, so we will have to wait and see how much it comes out to.’’

Kim said North Korea relies on hydropower for 60 percent of its power grid, and on coal-fired thermal power for most of the rest. Both are vulnerable: hydropower to droughts and freezing, coal to supply and quality problems.

Kim said a ‘‘once in a century’’ drought last year caused a 10 percent drop in the output of hydropower stations, which he said was largely offset by increased coal power output. Not surprisingly, rural areas, which are low on the priority list for energy allocations, except at rice harvest time, were hardest hit by shortages.

David von Hippel, senior associate with the Nautilus Institute think tank, which has done extensive research on North Korea’s energy situation, said he doesn’t believe the 20-50 percent boost is plausible.

He said the additional electricity from the plants could be ‘‘potentially very significant to the surrounding area, or to whatever area of electricity demand the plant is connected to,’’ but not very significant on the national scale.

Still, he added, assessing the North’s capacities, and even its needs, is complicated because Pyongyang makes so little information public. North Koreans also long ago adjusted their lifestyles to the realities of scarcity — for example, by not buying appliances or equipment that require electricity.

‘‘The country has lived under a shortfall for so many years that it’s difficult to know what demand would be if there were enough power,’’ he said.

I also wrote an article in 38 North on a new coal power plant being constructed in Kangdong County.

Read the full story here:
North Korea in rush to boost electricity supply
Associated Press
Eric Talmadge
2015-6-3

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Solar panel boom in North Korea

Wednesday, April 22nd, 2015

solar-equipment-center-2014-9-21

Pictured Above: Solar Equipment Center in Pyongyang

According to Reuters:

In a country notorious for a lack of electricity, many North Koreans are taking power into their hands by installing cheap household solar panels to charge mobile phones and light up their homes.

Apartment blocks in Pyongyang and other cities are increasingly adorned with the panels, hung from balconies and windows, according to recent visitors to the isolated country and photographs obtained by Reuters.

“There must be at least a threefold increase in solar panels compared to last year,” Simon Cockerell, who visits North Korea regularly as general manager of Beijing-based Koryo Tours, told Reuters from Pyongyang. “Some are domestically made, so that may have driven prices down.”

North Korea has long suffered from electricity shortages which plunge large parts of the country into darkness, providing a stark contrast in night-time photos taken from space to prosperous and power-thirsty South Korea.

The soaring sales of cheap and easily-installed solar panels reflect rising demand for electricity in North Korea as incomes rise and people buy electronic goods like mobile phones and the “notel” media player that need regular charging. North Korea, one of the poorest countries in the world, is home to 2.5 million mobile phone users, about 10 percent of the population.

Once reserved for Workers’ Party cadres, solar panels and voltage stabilisers are now sold openly both in markets and the hardware section of Pyongyang department stores, where small 20 watt panels cost just under 350,000 won – $44 at the widely-used black market exchange rate where a dollar is about 8,000 won, instead of the official 96 won.

Obtaining accurate data from North Korea is difficult, but roughly 10-15 percent of urban apartments in a series of recent photographs in North Korean cities obtained by Reuters appeared to have small solar panels attached to windows or balconies.

Whether that number translates nationally is unclear, but regular visitors have noted a significant increase in solar panel use across the country in recent months, either in urban areas or in one case in the backyard vegetable plot of a rural house.

MONEY IS POWER

Private solar panels are not illegal in authoritarian North Korea, where in recent years the government has tacitly allowed greater economic freedoms. However, some local authorities may demand a bribe for permission to install them, a defector said.

Electricity supply in North Korea is prioritised for factories or areas of political importance, but those with money or connections are often able to tap those lines illegally.

The country could be generating about 33 terawatt-hours of electricity a year, or just 7 percent of what South Korea generates, according to Tristan Webb, a former British Foreign Office analyst who visited North Korean power plants in 2013.

North Korea suffers from dry winters where Siberian winds can keep temperatures below freezing for months. The state exports much of its mined coal and relies heavily on hydro power, meaning electricity is in especially short supply in winter.

“We can heat our homes with a heater powered by a solar panel,” said Kim Yeong-mi, a North Korean defector who came to the South in 2012.

Pyongyang is home to a solar panel factory, and state propaganda has said the technology is in “effective use” in solar-powered lamp posts in other cities. North Korea is trying to use renewable energy to “make up the shortage of electricity,” state media said on Tuesday.

“Develop and make effective use of wind, tidal, geothermal and solar energy!,” was one of a barrage of slogans released by the ruling party in February.

A typical solar power set-up includes a panel, battery, and inverter for charging phones or powering appliances. Private car ownership remains rare in North Korea, but car batteries are popular in households to store power for blackouts.

In the Chinese city of Dandong on the frontier with North Korea, large red signs outside shops advertise solar panel and battery kits, aimed at traders from across the border. At one shop, the largest set-up on sale produces enough power to run a TV, laptop, mobile phone, fridge, washing machine, rice cooker and even an electric blanket – all increasingly common household goods for moneyed North Koreans.

“North Koreans didn’t really buy solar panels from us until two years ago,” said Yang Yanmeng, a trader in China’s Shandong province who has been selling solar panels since 2012.

“Now, up to 80-90 percent of our company’s products are sold to North Koreans,” he told Reuters by phone.

Read the full story here:
In North Korea, solar panel boom gives power to the people
Reuters
James Pearson
2015-4-22

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China rejects DPRK coal shipment (Again)

Saturday, April 4th, 2015

UPDATE 1 (2015-4-4): For the second time this year, the Chinese have rejected a shipment of North Korean coal. According to the Korea Herald (Yonhap):

China has returned a shipment of anthracite coal to North Korea because it failed to meet standards for mercury emissions, according to a local report on Saturday.

This appears to be the second rejection by China of the North Korean mineral this year.

The shipment arrived at the Longkou port of China’s northern coastal province of Shandong late last month, but was returned as its quality did not satisfy China’s environmental regulations, iQiru.com, a local Shandong Internet news site, reported, citing an unnamed Longkou port official.

The report did not elaborate further or include the volume of the rejected North Korean coal.

In September last year, China announced strict regulations against the sale and import of coal with high toxic pollutants, including mercury and sulfur, to improve the country’s air and water quality.

Anthracite coal accounted for 39.8 percent of North Korea’s total exports to China last year.

China’s imports of North Korean coal plunged 53.2 percent from a year earlier to 16.78 million tons in January this year, according to Chinese customs data.

ORIGINAL POST (2015-3-9): Back in October of 2014, Kevin Stahler was the first person to point out (as far as I am aware) that the DPRK’s coal exports to China were in decline. Quoting Kevin:

However, this year North Korea’s anthracite exports to China are on course for a hard landing. The total value of imported anthracite is down 23 percent in the first half of 2014 compared to a year earlier. That’s an annualized $340 million hit to North Korea’s balance of payments. But North Korea is not alone: China has seen a double-digit decline in both the value and volume of its total world coal imports from January – August 2014.

On March 4, 2015, Yonhap reported that China returned a shipment of coal to the DPRK for reasons related to domestic environmental protection regulations:

China has rejected imports of some North Korean anthracite coal because the coal failed to meet domestic standards for mercury emissions, a local newspaper reported Wednesday, in what appeared to be China’s first rejection of North Korean minerals over environmental concerns.

The shipment was returned to North Korea on Feb. 27 from the Rizhao port of China’s northern coastal province of Shandong, the National Business Daily newspaper reported, citing an unnamed port official.

The report did not elaborate further, or include the volume of the rejected North Korean coal.

After three decades of rapid industrialization, China regularly sees hazardous air pollution with levels of particulate matter rising to nearly 40 times the limits set by the World Health Organization during the winter months.

In September, China announced strict regulations against the sale and import of coal with high toxic pollutants, including mercury and sulfur, to improve the country’s air and water quality.

Anthracite coal accounted for 39.8 percent of North Korea’s total exports to China last year.

In January, China’s imports of North Korean coal plunged 53.2 percent from a year earlier to 16.78 million tons, according to Chinese customs data.

On March 9, UPI reported on one of the key aspects of China’s new environmental policies and how it will affect the DPRK:

China’s crackdown on coal-related pollution will take a heavy toll on the North Korean economy, South Korean newspaper Donga Ilbo reported Monday.

China’s plan is to drastically reduce coal consumption by 160 million tons in the next five years. The plan, presented at the National People’s Congress in Beijing, aims to reduce the fossil energy use that is contributing to severe pollution in big cities, The Australian reported.

Countries exporting coal to China are all affected, but the plan could create an economic crisis in impoverished North Korea. Coal and iron-ore exports are two of North Korea’s biggest exports to China, its biggest trading partner.

According to the Donga Ilbo, more than 97 percent of North Korean exports are shipped to China*, and coal, iron ore comprise 60 percent of all North Korean exports.

China’s anti-pollution policy is affecting North Korean cargo. A North Korean ship delivering coal to China was turned away at the coastal city of Rizhao on Feb. 27. The Donga Ilbo reported the coal did not satisfy China’s environmental regulations.

The rising ban and other factors are placing the impoverished North Korean economy in a tight squeeze.

Anna Fifield also covered this story for the Washington Post and Guardian.

*The article reports that China accounts for 97% of the DPRK’s international trade. This is only true if one excludes South Korean trade–which South Korea does because they consider North-South trade as “inter-korean” trade.

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DPRK-Russia trade in 2014

Wednesday, March 18th, 2015

UPDATE 1 (2015-3-18): Although overall trade volume between the DPRK and Russia was down in 2014, North Korea’s exports to Russia were up. According to Yonhap:

North Korea’s exports to Russia soared nearly 32 percent in 2014 from a year earlier, a report showed Wednesday, amid Pyongyang’s efforts to bolster ties with Moscow.

According to the report by the Korea Trade Investment Promotion Agency, North Korea’s outbound shipments to Russia reached US$10.17 million in 2014, up 31.9 percent from a year earlier.

By item, textile exports came to $4.7 million, or 46.2 percent of the total, followed by machinery with $1.6 million, musical instruments with $1.37 million and electrical equipment with $670,000.

Pyongyang also sold $250,000 worth of cars to Russia last year, 2.3 times more than the previous year, with shipments of optical devices soaring more than 60 times to $190,000.

Bilateral trade volume, however, fell 11.4 percent on-year to $92.34 million last year as Pyongyang’s imports from Russia shrank 14.9 percent to $82.17 million.

Crude imports dropped 7.9 percent on-year to $33.98 million last year, taking up the largest 41.7 percent share of the total imports.

“North Korea has been striving to strengthen economic cooperation with Moscow, though it will take time for the North to diversify its trade markets due to its heavy dependence on China in the past,” said Cho Bong-hyun, a senior research fellow at the state-run Industrial Bank of Korea (IBK) in Seoul.

Last year, more than 90 percent of its exports were bound for China. Bilateral trade between North Korea and China, however, fell 2.4 percent from 2013 to $6.39 billion in 2014, marking the first annual decline since 2009, according to Seoul data.

The 2014 figure is seen as signaling that the strained political ties between the two nations, particularly after the North’s third nuclear test in February 2013, have affected their economic relations.

Amid such languid ties with Beijing, North Korea has been ramping up efforts to forge a closer relationship with Russia, with the two nations declaring 2015 as a year of friendship.

ORIGINAL POST (2014-12-4): According to Yonhap, trade between North Korea and Russia (imports and exports)dropped significantly in the first three quarters of 2014:

Trade between North Korea and Russia dropped significantly this year, despite Pyongyang’s efforts to step up economic cooperation with Moscow, data showed Thursday.

Russia’s exports to North Korea reached US$59.01 million in the first nine months of this year, down 10.1 percent from the same period last year, according to the data by the Vladivostok office of the state-run Korea Trade-Investment Promotion Agency (KOTRA).

In particular, Russia’s exports of flour to North Korea plunged 72.2 percent on-year to $770,000.

Russia’s imports from its neighbor also fell 7.9 percent on-year to $6.46 million during the January-September period.

North Korea’s imports of electronics and coal from Russia also tumbled 61 percent and 44.6 percent, respectively, according to the data.

Russia’s imports of North Korean nuclear reactors, boilers and other machinery, meanwhile, shrank 57.1 percent on-year to reach $451,000,

Bucking the overall decline, Russia’s imports of North Korea-made clothes soared 35.5 percent on-year to $3.61 million, maintaining an uptrend of recent years.

North Korea has been intensifying efforts to expand economic cooperation with Russia, recently deciding to use the Russian ruble as a trade currency as well as launching a fledgling logistics project to link Russia’s border city of Khasan to the North’s port of Rajin.

Read the full story here:
N. Korea-Russia trade shrinks this year
Yonhap
2014-12-4

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North Koreans discuss curbs to outflow of natural resources

Thursday, March 5th, 2015

The Institute for Far Eastern studies (IFES) published the article below:

The Issue of Regulating Coal and Iron Ore Exports Raised in North Korea

There is a growing sense inside North Korea for a need to regulate the export of underground resources such as coal through imposing export tariffs or other trade barriers.

An overwhelming percentage of the country’s exports consist of underground resources and there is rising speculation that North Korea is pushing forward long-term transformation of its trade and industrial structure.

An article in a recent edition (published October 20, 2014) of Kim Il Sung University’s school newspaper has argued that “We need to protect the country’s precious resources by applying different tariff rates.”

The article stressed that “The subjects of export tariff first need to be selected for raw materials and energy resources that is urgently needed for the construction of a socialist economic powerhouse.”

In other words, there is a need to prevent the excessive exportation of goods through levying a high export tariff rate on underground resources.

The article specifically picked out coal and iron ore as underground resources which are important for economic development, and pointed out that “We need to do all we can to prohibit the export [of these resources].”

According to KOTRA (the Korea Trade-Investment Promotion Agency), in 2013 the percentages of coal and iron ore among North Korea’s total exports were, respectively, 42.9 percent and 9.3 percent, which amount to over half of all exports.

North Korea’s consideration of regulating the export of underground resources in such a situation is seen as an attempt to achieve long-term industrial development, which may decrease its foreign currency earnings in the short-run.

The Kim Il Sung University newspaper article also argued that “We must actively protect our country’s resources so that we can develop a vibrant and self-reliant national economy.”

The fact that last year North Korea’s export of anthracite* to China dropped for the first time in 8 years is also thought to be a product of such a policy consideration.

North Korea’s push to regulate the export of underground resources is viewed as an effort to reduce its dependence on China, but many are skeptical regarding how effectively North Korea will implement such a policy with its urgent need for foreign currency.

The article is interesting for three reasons.

The first is that DPRK policy-makers may find it preferable to impose a tariff on exports rather than actually control the number of organizations that are legally allowed to export natural resources. This raises a government capacity point. Alternatively, this could be seen as a tool to draw resources from the privileged JVCs and trading companies that are outside the control of the cabinet. In a sense, a tariff, if effectively implemented, could improve the fiscal position of the people’s economy by “taxing” all the trading companies under the control of different sectors of the party and military.

Second, Chinese environmental policies may be inadvertently accomplishing this policy outcome without the DPRK having to actually do anything. The amount of coal being exported to China is down significantly in 2014, and there are questions as to whether 2013 numbers will be achieved again in the near-term. However, Chinese environmental policies which reduce imports from the DPRK have a negative fiscal effect for Pyongyang since no trade actually takes place. Indeed, if Chinese imports of DPRK resources continue to fall, a tariff will make less and less sense.

And third, one of Kim Il-sung’s strategic concerns was that fraternal socialist countries would not invest in industrial production in the DPRK, and it would only become a valuable member of the communist trading block as a source of natural resources. Kim Il-sung was worried about what would happen to his country when the natural resources were all gone. Perhaps imposing an export tariff can be seen as a sign that there is a coalition in the leadership that wants to move away from natural resource exports and into a greater reliance on SEZ’s, domestic production, etc.

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DPRK-China trade in 2014

Monday, January 26th, 2015

According to Yonhap, DPRK-China trade drops slightly in 2014:

North Korea’s annual trade with its economic lifeline, China, fell 2.4 percent from a year ago in 2014, marking the first decline since 2009, data compiled by South Korea’s government trade agency showed Monday.

North Korea’s trade with China totaled US$6.39 billion last year, compared with $6.54 billion in 2013, according to the data provided by the Beijing unit of South’s Korea Trade and Investment Promotion Agency (KOTRA).

The annual trade figures between North Korea and China provided a fresh sign that strained political ties between the two nations have affected their economic relations.

At least on paper, there were also no shipments of crude oil from China to North Korea for all of last year.

A South Korean diplomatic source with knowledge of the matter, however, cautioned against reading too much into the official trade figures because China has provided crude oil to North Korea in the form of grant aid and such shipments were not recorded on paper.

Here is coverage in the Daily NK.

I have been unable to locate the KOTRA report, but the Choson Ilbo adds this:

China’s exports to the North were down 3.1 percent on-year and its imports from the North 1.5 percent, the diplomatic source in Beijing said quoting Chinese trade statistics.

Yonhap followed up with this from a Chinese foreign ministry press briefing:

Asked about the official absence of crude oil delivery to North Korea, China’s foreign ministry spokeswoman, Hua Chunying, referred the question to “competent authorities.”

“You mentioned a specific issue concerning trade between China and North Korea. I would like to refer you to competent authorities,” Hua told reporters during a regular press briefing.

“But, I want to highlight that the economic cooperation and trade between China and North Korea are normal,” Hua said.

Yonhap also provided the following information on oil shipments from China to the DPRK:

In previous years, China’s official shipments of crude oil to North Korea had been absent for several months, particularly after the North’s nuclear tests. However, it was extremely unusual that, at least on paper, China sold no crude oil to North Korea for all of last year.

In 2014, China’s exports of petroleum products to North Korea jumped 48.22 percent from a year earlier to US$1.54 million, according to the data based on Chinese trade statistics and compiled by the Beijing unit of South’s Korea Trade and Investment Promotion Agency.

“Although final statistics show that China’s exports of crude oil to North Korea were counted as ‘zero’ in 2014, experts suggest that the possibility of China’s suspension of crude oil exports to North Korea remains low,” the agency said in a statement.

South Korean diplomatic sources in Beijing have also cautioned against reading too much into the official Chinese trade figures because China has provided crude oil to North Korea in the form of grant aid and such shipments were not recorded on paper.

There has been no clear indication that the 2014 trade figures reflect China’s willingness to use crude oil as leverage to press North Korea to change course in its nuclear ambition.

Yonhap (via Korea Times) also reports that anthracite exports to China are down in 2014:

North Korea’s exports of anthracite to China tumbled nearly 18 percent in 2014 from the previous year, the first annual drop in eight years, data showed Friday.

North Korea exported US$1.13 billion worth of anthracite to China last year, down 17.6 percent from a year earlier, according to data from the Korea International Trade Association.

It was the first on-year decline in North Korea’s anthracite exports to China since 2006.

The volume of anthracite exports also decreased 6.4 percent on-year to 15.43 million tons last year, according to the KITA.

Despite the drop, anthracite accounted for 39.8 percent of North Korea’s total exports to China in 2014.

According to the data, North Korea’s exports of iron ore to China plunged 25.7 percent on-year to $218.6 million last year, the smallest amount since 2010.

For lots more data on the DPRK’s international trade, see also these eight great posts:
1. North Korea-China Trade Update: Coal Retreats, Textiles Surge
2. How Has the Commodity Bust Affected North Korea’s Trade Balance? (Part 1)
3. How Has the Commodity Bust Affected North Korea’s Trade Balance? (Part 2)
4. Nicholas Eberstadt’s “Dependencia, North Korea Style” (I would have gone with “Our Style Dependencia”)
5. NK News on coal shipments in 2014.
6. Radio Free Asia on coal shipments.
7. N. Korea’s smartphone imports from China hit record
8. China’s exports of jet fuel to N. Korea rebounds in 2014

Read the full story here:
N. Korea’s 2014 trade with China marks 1st drop in 5 years
Yonhap
2015-1-26

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