By Benjamin Katzeff Silberstein
The July numbers for China-North Korea trade are out. Reuters:
The world’s second-largest economy imported and exported goods worth $456 million in July, down from $489 million in June, according to data from China’s General Administration of Customs.
It was up from $426 million in July last year, according to data on the customs website.
Year-to-date, trade was up 10.2 percent at $3.01 billion.
The data indicates that China’s move to halt North Korean coal imports in February has crimped Pyongyang’s ability to raise hard currency through exports.
Iron ore arrivals from North Korea in July also sank to their weakest since February, while China’s gasoline exports to the isolated state hit their lowest since January 2016.
China’s imports from North Korea were $156 million, down 3 percent from last month and a third lower than a year ago, based on data on the customs website. For January-July, imports were $1.04 billion, down 16.3 percent.
Exports were $300 million, down from $327 million in June, but up from $194 million in July last year. Year-to-date, they were up a third at $1.97 billion.
On Aug. 6, the United Nations Security Council unanimously imposed new sanctions on North Korea banning exports of coal, iron, iron ore, lead, lead ore and seafood, in a bid to choke off a third of Pyongyang’s $3 billion in annual export revenue.
The crackdown on major commodity exports was aimed as punishment for intercontinental ballistic missile (ICBM) tests in July and is due to take effect in early September.
Last week, Beijing issued an official ban on the imports effective from Aug. 15 as it moved to implement the sanctions.
Sources told Reuters China was also pressuring its iron ore traders to stop buying the commodity from North Korea, tightening the screws on Pyongyang even before sanctions.
The data also comes after state-owned China National Petroleum Corp suspended sales of fuel to North Korea in June over concerns it wouldn’t get paid, cutting off crucial supplies. The suspension is still in place.
Full article:
China July trade with North Korea slows from June as coal ban bites
Josephine Mason
Reuters
2017-08-23
And here:
* July gasoline exports down 97 pct vs year ago
* Just 120 tonnes shipped to North Korea in July
* CNPC stopped sales over payment fears - sources
* Iron ore imports in July lowest since Feb
(Recasts to lead with gasoline, adds details, changes slug)
By Chen Aizhu
BEIJING, Aug 23 (Reuters) - China's gasoline exports to
North Korea evaporated to a dribble in July, according to
customs data, the strongest sign yet that the suspension of
sales of the fuel by state oil major CNPC has cut critical
supplies to its isolated neighbour.
Beijing's General Administration of Customs said on
Wednesday Chinese shipments of gasoline dropped 97 percent from
a year ago to just 120 tonnes of the fuel - worth little more
than $100,000. The number was down from 8,262 tonnes in June.
Monthly fluctuations in the data are not unusual, but this
was the fourth-lowest volume on Reuters' records of customs data
going back to January 2010.
Customs data also showed China's trade with North Korea fell
last month as a ban on coal purchases from its isolated
neighbour slowed imports amid growing pressure from the United
States to rein in Pyongyang's missile programme.
A prolonged supply cut would threaten critical supplies of
fuel and could force North Korea to find alternatives to its
main supplier amid international pressure on Pyongyang to curb
its nuclear and missile programmes.
At the end of June, Reuters reported China National
Petroleum Corp (CNPC) suspended sales of gasoline and fuel to
North Korea over concerns CNPC would not get paid for its goods.
Fuel prices in the country surged following the cut and the
measure is still in place, people familiar with the matter say.
"This confirms that CNPC has truly stopped supplies," said
one Beijing-based trading source familiar with China's oil
transactions with North Korea. "The amount is so small, it's
what would typically be lost during transportation."
Gasoline typically accounts for the bulk of fuel exports to
North Korea, but July data showed the biofuel, ethanol, took the
top spot with shipments of 4,137 cubic metres, worth $1.9
million.
Meanwhile China's iron ore imports from North Korea fell
sharply in July, the month before the United Nations passed a
vote to impose tougher sanctions on Pyongyang. The United
Nations Security Council unanimously imposed new sanctions on
North Korea targeting its exports of coal, iron ore, lead, lead
ore and seafood in sanctions to take effect in early September.
Arrivals of iron ore fell 24.5 percent in July from the same
month a year earlier to 175,980 tonnes. That's down 21 percent
from June and the lowest since February, according to customs'
records.
Beijing had pressed traders to stop buying from the country
even before the United Nations Security Council vote on further
sanctions to rein in Pyongyang's missile and nuclear programme,
a sign of China tightening the screws on Pyongyang.
In July, China bought no coal from North Korea, the fifth
month after Beijing halted coal shipments in February.
The table below gives a breakdown of imports and exports of
major commodities between the two nations:
July June 2017 yr-on-yr Jan-July % change
2017 % change 2017
Imports
Coal 0 0 - 2,678,131 -78.6
Iron ore 175,980 224,059 -24.5 1,510,761 41.7
lead ore & 13,090 13,218 29.1 77,407 45.15
concentrates
Exports
Ethanol 4,137 4,126 509 19,734 319.7
Gasoline 120 8,262 -96.5 45,889 -8.8
Diesel 1,162 367 11,515 10,847 -64
Jet fuel 153 140 278.6 1,103 47.4
Other fuel 596 298 -97.2 19,250 -65.26
oil
Fuel No. 5-7 275 844 -41.4 3,953 -8.9
LPG 79 107 302.8 553 75.4
In tonnes except for ethanol in cubic metres
China July gasoline exports to North Korea almost wiped out -customs
Josephine Mason
Reuters
2017-08-23
A few thoughts on this:
First, overall trade is up between the countries from the same month one year ago, by ten percent. The North Korean economy may be under pressure from China at the moment, but it is not isolated. Moreover, Chinese imports are down by one third but one has to wonder why China would let North Korea run a trade deficit if it weren’t expecting compensation in the future by more imports.
Second, gasoline exports to North Korea are down by 97. This number strikes me as almost conspicuously high and reminiscent of Saddam Hussein’s electoral victory figures (in North Korea, the united front controlled by the Worker’s Party always gets a full 100% of the votes). China has a strong interest at the moment in making it seem like it is being tough on North Korea and a figure like 97 percent certainly makes for good optics. Diesel and petrol prices have remained relatively consistent in Pyongyang through the spring and summer, not changing in July, but it is only now that Chinese customs are reporting a 97 percent drop.
Third and relatedly, we don’t know what (if anything) has happened with the crude oil deliveries, which to my knowledge is largely a form of donation from China to North Korea of some 520,000 tonnes per year. This is roughly twice the quantity of the diesel exports from China to North Korea per year, though these amounts are difficult to compare. It is easy to imagine a scenario where these increase to offset the losses from the lowered gasoline exports. And of course there’s the smuggling. Meanwhile, diesel exports actually rose over the past month.
Fourth, to really get a grasp of trading figures, I would argue it is necessary to look at full years. Surely there are ways to, for example, date contracts in order to make it look like deliveries and receptions of goods reach certain levels at certain times, or by simply postponing some exports and imports to a later date. Perhaps we will see trading figures later on after the bluster has really settled that compensate for shortfalls at this moment.
