Food prices in North Korea: vegetable prices up, rice prices stable

April 28th, 2016

By Benjamin Katzeff Silberstein

Daily NK reports that vegetable prices have gone up in North Korea’s border regions, due to cold weather and forced mobilization efforts (the 70-day battle). But rice prices remain stable (my emphasis):

The price of vegetables including cabbage and radish has surged around the border regions in North Korea and to a lesser degree, further inland. The sudden spike is believed to be driven by sanctions jitters, unseasonably cold temperatures, and excessive mobilization for the upcoming Party Congress, but is being viewed by some as a temporary upswing, given the continual stability in rice prices and foreign exchange rates. 

“Back in February, cabbage was selling for around 2,500 KPW (per kilogram), but prices have suddenly jumped to 7,000 KPW. That’s more expensive than rice,” a Daily NK source in Ryanggang Province reported on April 25. “Now is usually the time when food supplies are short (because of the barley hump), but it looks like the hike was triggered by more people mixing in dried greens with their rice to conserve their rice supplies, in the belief that the food situation may worsen due to [implications stemming from] the sanctions.”

[…]

“In some areas of Taehongdan County, people are eating so-called ‘radish noodles,’ which are made by coating radish leaves with potato starch,” the source explained.

On a nerdy note, I wonder if the connection between potato starch and Taehongdan is merely accidental. Remember, Taehongdan is the birthplace of Kim Jong-il’s 1998 “Potato Revolution.”

Food prices also seem to be impacted by the blitz-mobilization campaign leading up to the 7th Party Congress (my emphasis):

Conditions in the central inland areas are not much different. Individuals who would normally grow their own vegetables have seen their schedules disrupted by ongoing “70-Day Battle” mobilizations. “Thanks to the continual mobilizations, said by many to be ‘turning their hearts into black lumps of coal’, ahead of the Party Congress, business at the markets has lost its vibrancy and the residents are miserable,” a source in Pyongyang told Daily NK.

Rice prices, meanwhile, remain notably stabile:

Despite these high prices, movements on the rice and foreign currency front have remained relatively stable, leading people to believe the spike in vegetables will be short lived.

“Vegetables are not export items and therefore their prices are determined by domestic supply and demand,” the Pyongyang-based source noted. “However strong the sanctions may be, rice prices have nonetheless remained the same and, under these conditions, not many will choose to eat expensive cabbages over rice,” the source added, suggesting that prices are likely to return to normal as the markets readjust for supply and demand.

Full article here:
Vegetable prices spikes, rice remains stabile 
Daily NK
Kang Mi Jin
2016-04-28

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DPRK builds replica Blue House

April 27th, 2016

Blue-house-replica-ROK

The-real-blue-house

Pictured above: (Top) South Korean military image of the replica blue house built in North Korea (Bottom) A Google Earth satellite image of the Blue House in Seoul.

The South Korean military is reporting that the North Koreans have built a replica of the Blue House in “Dewonri/Daiwonri”. According to the Japan Times:

North Korea is preparing to blow apart a replica of South Korea’s presidential Blue House on an artillery range outside Pyongyang, in an apparent propaganda exercise, the South’s military said Wednesday.

An official with the Joint Chiefs of Staff in Seoul said the North’s military had been detected building the half-sized replica at the Daiwonri range near the capital earlier this month.

“The North is apparently preparing to showcase a mock attack on the Blue House using the replica as a target,” the official said.

Around 30 artillery pieces, hidden under coverings, have been brought to the range.

“The exercise is believed to be aimed at stirring up hostility against the South, summoning up loyalty (to leader Kim Jong Un) and fueling security concerns in the South,” the official said.

I refer to this area as the “Taewon-ri (대원리) Artillery Range”, and I have previously written about it at NK News here. The Americans call the location “Sungho Dong Military Training Area”.

The South Korean military also released a second photo:

area-near-Taewon-ri

You can see this location on Google Earth at 38.944429°, 125.886490°, however the replica Blue House is too recently built to appear on Google Earth imagery.

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FAO: North Korean food production falls for the first time since 2010

April 27th, 2016

By Benjamin Katzeff Silberstein

27 April 2016, Rome – North Korea’s total  food production – including cereals, soybeans and potatoes in cereal equivalent – is estimated to have fallen in 2015, the first drop since 2010, and is expected to worsen food security in the country, according to a FAO update issued today.

Last year, total food production in North Korea (officially known as the Democratic People’s Republic of Korea) is estimated to have been about 5.4 million tonnes compared to 5.9 million tonnes in 2014, marking a 9 percent decrease, the update said.

In particular, production of paddy rice, the country’s main staple, dropped by 26 percent to 1.9 million tonnes, mainly due to poor rains and low availability of water for irrigation.

FAO’s estimate for the country’s cereal import requirements for the 2015/16 marketing year (November-October) amounts to 694,000 tonnes. With 300,000 tonnes expected to be covered by government imports, the uncovered deficit of 394,000 tonnes represents the highest gap since 2011/12, the report said.

The estimates are based on official production figures and analysis by FAO’s Global Information and Early Warning System (GIEWS) in collaboration with the European Commission’s Joint Research Centre.

Food security set to deteriorate

Given the tight food supplies in 2015/16, the country’s food security situation is expected to deteriorate from the previous year when most households were already estimated to have poor or borderline food consumption levels.

Crop overview

Besides severely affecting the rice crop, the dry conditions during the 2015 main season, coupled with low irrigation water availability following recurrent dry spells since July 2014, also impacted negatively on the production of maize, the country’s second most important cereal crop. Despite an expansion in plantings, maize output is estimated to have decreased by 3 percent to 2.29 million tonnes in 2015.

The report noted that the output of more drought-resistant soybeans – the most important source of protein in North Korea -increased by 37 percent to 220,000  in 2015.

Similarly, the output of other cereals (sorghum, millet, buckwheat) is put at 156,000 tonnes, almost triple the level of 2014.

Production of 2016 early season potatoes and minor wheat and barley, to be harvested from June, is forecast at 363 000 tonnes, 21 percent higher than the sharply reduced 2015 level.

Fuel and fertilizer shortages

Today’s update noted that reduced supplies of fertilizer and fuel in 2015 also limited crop production in 2015.

Source:
North Korea’s food production falls for first time since 2010 as water scarcity hits agricultural sector
Food and Agriculture Organization of the United Nations
04/27/2016

The full FAO report that the press statement refers to can be found here.

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DPRK – Russia Trade in 2015 (UPDATED)

April 22nd, 2016

UPDATE 1 (2016-4-22): According to the Russian Exports National Information Portal:

In 2015 North Korean-Russian bilateral trade volume decreased by 10% and reached 83.2 million USD compared to 92.2 million USD in 2014.

North Korean exports to Russia fell to 5.7 million USD (by 43%) while imports fell to 77.5 million USD (by 6%) .

Figure 1. 2007-2015 North Korean-Russian bilateral trade turnover, million USD. Source: ITC Trade Map.

DPRK-Russia-trade-2015

North Korean exports to Russia

North Korea primarily exports to Russia the following products:

▪ Fish, crustaceans, molluscs, aquatic invertebrates nes (29%)
▪ Articles of apparel, accessories, not knit or crochet (27%)
▪ Musical instruments, parts and accessories (17%)
▪ Railway, tramway locomotives, rolling stock, equipment (6%)
▪ Manmade filaments (5%)
▪ Electrical, electronic equipment (4%)
▪ Plastics and articles thereof (3%)
▪ Wadding, felt, nonwovens, yarns, twine, cordage, etc (2%)
▪ Rubber and articles thereof (2%)
▪ Machinery, nuclear reactors, boilers, etc (1%)
▪ Cereal, flour, starch, milk preparations and products (1%)
▪ Tanning, dyeing extracts, tannins, derivs,pigments etc (1%)
▪ Milling products, malt, starches, inulin, wheat gluten (1%)

In 2015 the imports of North Korean made products in Russia experienced a significant rise . The imports of man-made filaments rise by 8733%; the imports of railway, tramway locomotives, rolling stock, equipment- by 5283%.

Russian exports to North Korea

In 2015 Russia has exported to North Korea the following products:

▪ Mineral fuels, oils, distillation products, etc (83%)
▪ Wood and articles of wood, wood charcoal (4%)
▪ Cereals (4%)
▪ Milling products, malt, starches, inulin, wheat gluten (3%)
▪ Fish, crustaceans, molluscs, aquatic invertebrates nes (3%)
▪ Pharmaceutical products (1%)

2015 showed a significant rise in Russian exports to North Korea of cereal, flour, starch, milk preparations and products (+706%). At the same time the exports of machinery, nuclear reactors, boilers (-97%) showed a significant fall.

I have posted a PDF of the source web page here.

ORIGINAL POST (2015-6-4): According to Leo Byrne at NK News:

North Korean trade with Russia decreased sharply in the first quarter of 2015, according to data from the ITC Trade Map, despite continued attempts to improve bilateral economic cooperation between the two countries.

Both imports and exports between Russia and North Korea fell in the first four months of 2015 compared to 2014 numbers.

Exports from North Korea to Russia fell from more than $3 million in the fourth quarter of last year to approximately $500,000.

The drop was mostly on the back of a big reduction of machine and clothes exports to Russia. While the latter group also appears to fluctuate based on the season, imports in the first four months of 2015 were also lower than those a year earlier.

Exports from Russia to North Korea account for the largest share of trade between the two countries, and also fell in the first quarter.

Overall, Russian exports fell by nearly 20 percent so far in 2015, compared to last quarter of 2014. At $17 million, the figure was 70 percent of that in the same period last year.

North Korea’s lower imports from Russia were mainly due to a large decrease in food imports.

Throughout the last six months of 2014, the DPRK imported more than $12 million in cereals from Russia, but these imports appeared to cease in 2015.

The overall numbers dropped despite an uptick in North Korean imports of Russian coal.

The figures continue a trend of decreasing trade between the two countries. From 2013 to 2014 trade values also fell, but were not as low as the most recent 2015 figures.

The news comes despite a flurry of diplomatic and political exchanges between the two countries geared towards increasing economic cooperation and trade, with Russia setting a target of $1 billion in trade by 2020.

Read the full story here:
Russia, North Korea trade drops in Q1 [2015]
NK News
Leo Byrne
2105-6-4

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Kim Jong-un’s new private Sinchon runway

April 21st, 2016

Sinchon-Runway

Pictured Above (Google Earth):  A 2015-10-26 satellite image of the new runway constructed at the Kim family compound in Sinchon ( 38.350362°, 125.534610°)

I reported in Radio Free Asia this week on Kim Jong-un’s new Sinchon runway. This is the 6th small-craft runway to be built in the Kim Jong-un era and the fifth to be built to service a restricted family compound. We know that this is a Kim family compound because Kenji Fujimoto visited it and took pictures.

The runway is approximately 600m long and was built between January and October of 2015. It appears to be built of concrete, unlike some other runways that appear to be made of asphalt, and there do not appear to be any facilities for sheltering, refueling or repairing any aircraft that land here–indicating that it is not a node in Kim’s transportation network.

Unlike the family compounds in Kangdong and Wonsan, this Sinchon residence has not been featured in any official media, so it is unclear how many times Kim Jong-un has actually visited the place. It is most known for its hot spring pools and saunas.

The compound was already served by dedicated highway linking the compound to the Pyongyang – Kaesong Highway, and there is a train station nearby that has been equipped to receive trains thought to be carrying the former leaders.

The only other noticeable change has been the expansion of the security perimeter on the northern side of the compound.

 

 

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Pyongyang’s ‘Mirae Shop’ opens, showing Kim Jong Un’s emphasis on science and talents

April 21st, 2016

Mirae-shop-2015-8-6

Pictured above: The Mirae Shop (R) and Mirae Health Complex (L)

Institute for Far Eastern Studies (IFES)

Mirae Shop’ (literally ‘future shop’) has reopened, showing the importance and privilege being placed on developing science and talented people in the Kim Jong Un era. The store is located along the banks of the Pothong River in Pyongyang. On April 12, state media outlet Korean Central News Agency (KCNA) reported that “since the store’s reopening in early April, it has been packed with scientists, engineers and people coming in every day.”

Mirae Shop was first opened in 2012 and recently moved to its current location. The store’s architecture portrays rockets and earth-like pillars holding up the roof. The store sells domestically produced goods such as home appliances, cosmetics, daily necessities, and food.

The name of the shop was chosen to by Kim Jong Un to commemorate the late Kim Jong Il’s visit to the store in January 2012. He ordered during on-site instruction last March to “open the store as soon as possible to let not only scientists and engineers but everyone to come and shop as much as they please.”

Prior to the construction of the store, Kim Jong Il himself took charge of the store’s site, architectural design, construction, construction materials, and products guarantee policy and on December 15, 2011, just before his death, he ordered for “the store to be used by scientists and engineers.”

Mirae Shop opened initially in 2012 in Pyongyang to commemorate the 100th anniversary of Kim Il Sung’s birth. It was opened for scientists and engineers to shop. KNCA also introduced the store and explained how the name was chosen by Kim Jong Un. The report also underscored how development of science and technology is the key factor in the country’s prosperity.

According to KCNA, this store has a variety of popular products from home appliances to groceries and has a wide range of customer services such as personal tailoring, watch/clock repairs, elevators wide enough to accommodate shopping carts, and fountain drinks served in the lounge.

The store is used mainly by the employees and researchers from Kim Il Sung University and Kim Chaek University of Technology and scientists from the National Academy of Science.

I have also written about the Mirae Shop and Health Complex in Radio Free Asia.

Here are some photos and information posted to Naenara.

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Kim Jong-un’s Party Congress prep: construction projects

April 19th, 2016

By Benjamin Katzeff Silberstein

Kim Jong-un has made at least two announcements recently, as the Korean Worker’s Party heads for its 7th Party Congress in May, about construction projects to be done. One of them is an orphanage in Ryanggang province, Daily NK reports:

Projects underway to promote Kim Jong Un’s legacy as a leader ahead of the 7th Party Congress in May are said to be in full swing across the nation. One such project taking place in Ryanggang Province calls for the full mobilization of residents to build an orphanage as an expression of the leader’s “love for the next generation,” Daily NK has learned.

“Authorities have recently been harassing residents saying that the orphanage under construction next to Kim Jong Suk Teachers’ College in Yonbong-dong needs to be ready for the Marshal’s (Kim Jong Un) inspection by the time of the Party Congress,” a source in Ryanggang Province told Daily NK on Thursday. “The provincial party office has been hurrying people along, claiming the construction must be completed before the event.”

Progress was said to be slow during the winter, which was unseasonably cold, but construction efforts are now appearing to ramp up.

The project is being driven by the provincial head secretary and other cadres from the provincial Party and People’s Committee and is being promoted as a means to express loyalty to the leader, who has emphasized his “love for children,” said the source.

She added that cadres associated with the efforts, who have confidently stated that the facility will see completion before the Party Congress, have also been intensifying crackdowns on those seeking to avoid mobilization, out of concern that failure to complete the project on time may lead to issues of accountability.

“Vendors who are busy trying to make a living in the market were often able to get out (of mobilization) with bribes, but even that isn’t easy now,” a separate source in Ryanggang Province explained.

“The price for skipping a day of mobilization is now up to 10 RMB (13,000 KPW) a day per head, so some find it more affordable to just go to the construction site.”

The 13,000 KPW demanded is enough to purchase approximately 2kg of rice based on current prices, which is far from negligible for most members of the public. The higher price tag in effect acts as a tool to turn up the heat on people for mobilization.

The pressure to complete the project before the major political gathering has led to mobilization of students in the afternoons and workers at state-run factory as well.

The near full mobilization also involves specialized colleges, meaning that among the younger generation, stormtroopers (who are working on a railway project in Samjiyon) are seemingly the only group among ordinary residents that are exempt from the orphanage project.

Full article:
Kim Jong Un calls for construction of new orphanage in time for Party Congress
Kang Mi Jin
Daily NK
2016-04-19

IFES at Kyungnam University has also published an analysis of the news about the Ryomyong street project, which Curtis has already written about in this blog. They note that the recent sanctions do not seem to have altered plans for the project. Kim Jong-un’s rhetoric instead highlights the project as a blow against the international community and the US — North Korea will go full steam ahead on its own policies and no outside pressure can hold them back (my emphasis below):

On March 18, the state media Korean Central News Agency (KCNA) reported that Kim Jong Un declared the construction of ‘Ryomyong Street’, which is to be built between Kumsusan Palace of the Sun and the Ryonghung Crossroads in Pyongyang. The street’s name signifies a place where ‘the dawn breaks in the Korean revolution’. Kim also mentioned that the area is to be surrounded by magnificent skyscrapers and multi-level buildings that fit the geographical characteristics surrounding the palace, displaying the Party’s idea of giving importance to science and talents in socialist Korea.
[…]
Along these lines, Kim put emphasis on the policy of securing building materials in constructing the new street and to diversify the size, design and color of decorative objects on the exterior of buildings. He also instructed for the mobilization of ‘soldier-builders’ who previously worked on the construction of Mirae Scientists Street. The construction of the new street shall be carried out with “Mallima speed” during the country’s ‘70-day campaign’ in run-up to the Party Congress scheduled for this upcoming May. The news report also stated that “the party, state, and society should render positive assistance to the construction and the Cabinet, commissions, ministries and national institutions take the lead in this work.”

According to the report, Kim Jong Un also said that “The construction of the street is not merely for formation of a street but serves as a political occasion of clearly showing the spirit of the DPRK standing up and keeping up with the world, despite all sorts of sanctions and pressure by U.S. imperialists and their followers, the appearance of the country advancing to realize the great ideal of the people and truth that the DPRK is able to be well-off in its own way and nothing is impossible for it to do.” The construction of the street appears in part as a means to show off the strength of ‘Songun’ Korea, following in the footsteps of Kim Jong Il’s policy.

Despite the strong sanctions imposed upon the country by the international community, North Korea is striving to achieve some form of economic success. The 70-day campaign has been initiated in the run-up to the Seventh Congress of the Workers’ Party. North Korean media are boasting about the country’s successes on the production front since the campaign’s initiation, saying “under the Juche ideology, people are working hard especially in the fields of electricity, coal, metal, and railroad transportation that they have achieved great success in the [campaign’s] first week.”

Full article here:
North Korea to Construct ‘Ryomyong Street’ Despite Sanctions
Institute for Far Eastern Studies
03-29-2016

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North Korean state takes over foreign currency stores

April 19th, 2016

By Benjamin Katzeff Silberstein

Donju life might not always be what it is cracked up to be. Radio Free Asia reminds us that regardless of how well North Korea’s upper-middle class traders might be doing, the economic framework is still highly arbitrary:

North Korean hard currency shops providing foreign products for sale to the country’s wealthier citizens may soon see a full government takeover of its supply chains, leading to a drop in the quality and hike in the price of hard-to-obtain goods, North Korean sources say.

The stores, which require payment in Chinese yuan or U.S. dollars, have operated in recent years in Pyongyang and other large cities under the management of private businessmen who pay large portions of their profits to the central government.

Government-run trading firms are now poised to take over the purchase and pricing of products sold in the lucrative stores, though, a source in China’s Dandong city, just across the Yalu river from North Korea, told RFA’s Korean Service.

Until now, shop managers have gone to China themselves to bring back products—including clothing, cosmetics, and furniture—or sale in their stores, RFA’s source said, speaking on condition of anonymity.

“If this system of supply changes, not only will store managers be prevented from going to China, but no use will be made of their marketing and management skills,” the source said.

Once the new system is implemented, stores will have to submit a list of needed products to their city’s local trading firm, which will then make the purchases from China itself, the source said.

“There are doubts that [the government] will be able to supply needed products on time, though, and the change in quality and price of the items may lead to conflicts between store managers and the trading organizations handling product supply,” he said.

Profit grab seen

Separately, a source in the capital Pyongyang said no official statement announcing the change has yet been made.

“But there is a high possibility the new system will be established after the [ruling Korean Workers’ Party] convention in May,” he said.

If put in place, the move may be aimed partly at further reducing the profits earned by store managers, who already pay most of what they earn to the government of the reclusive, U.N.-sanctioned state, the source in Pyongyang said.

“North Korea’s foreign currency situation is urgent now,” the source said.

“From now on, the managers of foreign-currency shops will receive only a small salary, as they did in the past,” he said.

“Sales will drop, though, and the management will experience difficulties,” he said.

Full article here:
North Korean ‘Foreign Currency’ Stores Face State Takeover
Jonhoo Kim
Radio Free Asia
04-19-2016

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Choson Exchange 2015 report

April 19th, 2016

Choson Exchange has published their 2015 annual report. Read it here to learn about the interesting work they are doing in the DPRK.

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North Korea’s natural resource risks: Kim Jong-il’s own take

April 14th, 2016

By Benjamin Katzeff Silberstein

As North Korea debates and experiments in economic strategies, it’s always interesting to go back and look at older debates of a similar nature. While reading vol. 14 of Kim Jong-il’s Collected Works (Sonjib) I stumbled upon an interesting speech attributed to Kim from 1995.* Whether it was foresight or just common logic of political economy, Kim actually warned of the risks of North Korea becoming a mere natural resource exporter to other countries, without reaping the full benefits of trade. Recall that one of the charges against Jang Song-taek was selling out the country’s natural resources for his own benefit. The issue itself, of course, is much older.

In the speech, given to an audience of Central Committee functionaries, Kim attacks cadres that have a faulty understanding of foreign trade under socialism, and think only about how their own “units” (단위) can make foreign currency profits (p. 8). He also emphasizes the need to calculate all the costs involved with foreign trade, including production costs at home, to calculate actual profit.

The most interesting part, in my opinion, however, is where Kim gets to the natural resource question. Kim states that natural resources shouldn’t just be sold to other countries, but processed (가공) domestically to the greatest extent possible (p. 10). He says that “now, capitalists are buying natural resources at a cheap price from our country, processing them and selling them to a higher price.”

Kim complains that it’s a grave crime that capitalists are pocketing their own wallets by selling off North Korea’s own resources by processing them, and that North Korea could become mere suppliers to monopoly capitalism if it doesn’t start processing their natural resources itself. He also states that those who just sell off natural resources without processing are just like slaves to foreign countries.

Kim also warns people about thinking that foreign currency can be earned “for free.” “The imperialists and capitalists never give anything to anyone for free,” Kim states, and says that if capitalists say they have anything to give, it is because they have their own desires” (p. 11).

This speech is a reminder that North Korea has grappled with how to handle its natural resources for a long time, and it suggests that controversies abounded in the 1990s as well.

*These works are sometimes edited after the fact, sometimes several times over, but this edition is from 2000, published by the Worker’s Party Publisher (N’odongd’ang chulpan’sa). All translations are my own, and if anyone has any corrections to offer, please get in touch.

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