Archive for June, 2019

Rice prices in North Korea have risen by more than a quarter in two months. Why?

Thursday, June 27th, 2019

By: Benjamin Katzeff Silberstein

Looking at the latest figures from Daily NK’s market price data index, there are a few interesting developments to note.

First, rice prices have gone up quite a bit over the past few weeks. This in itself not dramatic or unusual. After all, rices prices tend to climb during the lean season closest to the next harvest, between May and September (roughly). But if the climb continues, that could be the markets finally catching up to the supply shortages. (Though, as I’ve written about numerous times, we can’t read the calm of the market prices as a refutal of the food shortage claims. It’s more complicated than that.)

Average market price in North Korea, late June 2018–2019. Source: Daily NK.

As the graph shows, the latest price observation (June 25, 2019) is slightly higher than the closest equivalent from last year (June 26, 2018). It’s not by very much – a price difference of 227 won isn’t what I would call significant – but still, prices may continue to climb from now and onward. We just don’t know.

More significant and interesting, however, is that prices have climbed by quite a bit and quite quickly over the last couple of months. On April 30th, Daily NK reported an average market price of 4070 won per kg. On June 25, 2019, that same price was 5140. That’s an increase of 26 percent in less two months.

In the grand scheme of things, it’s not a massively high price. But the quick increase is notable, and it’ll be important to keep an eye on the future price trajectory to see if it’s part of a longer trend.

Average rice prices on markets in three North Korean cities, July 2017–late June, 2019. Data source: Daily NK.

Note that the price hump to the left is from September 2017, and prices tend to be higher later in the fall.

Second, corn prices have also climbed during the same period. Corn, it can reasonably be assumed, is an inferior substitute good for rice – in other words, its less popular cousin. When rice gets more expensive, people should logically buy more corn. Corn prices have also climbed in the past few weeks, but not to historically significant highs.

Average corn prices on markets in three North Korean cities, July 2017–late June, 2019. Data source: Daily NK.

Third, pork prices have declined quite steeply over the last two months. Not to historical lows, at least not yet, but still.

Average price of pork, three North Korean cities, late June 2018–2019. Data source: Daily NK.

If one wanted to fit this into a broader narrative of food shortages, here’s how it could be done: if people need to spend more of their income on staple foods such as rice, they have less to spend on more luxurious foods such as pork. Subsequently, prices should decline.

Fourth, gas prices, too, have dropped, and very steeply, over the past few weeks. This price drop is most likely caused by seasonal factors (which makes sense given the summer weather), since the same drop occurred last year too. But it could also be that China has increased supply with the improvement of relations with North Korea. In any case, it does look like gas prices are back in their normal range, and a drop this steep over time certainly makes things easier for a wide range of economic sectors in the country.

Average gas price, three North Korean cities: July 2017–late June, 2019. Data source: Daily NK.

In sum, the higher rice price may be part of a longer-term trend, and it shouldn’t be surprising if the seasonally normal increase of the summer and fall months ends up being higher than usual. As of now, it’s not a dramatic increase, but for those many North Korean consumers already living on thin margins, it may be quite problematic.

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Renewable energy power plant for Sinuiju modernization project

Friday, June 21st, 2019

Benjamin Katzeff Silberstein

Daily NK reports:

“A massive renewable energy power plant was built to deal with the chronic lack of electricity in North Pyongan Province,” a source in North Pyongan Province told Daily NK. “The power plant now supplies Sinuiju and other areas of the province.”

Meari, a North Korean propaganda outlet, published an article on June 2 entitled “The Construction of a Renewable Energy Power Plant that Produces 1,000 kW by the North Pyongan Province Electricity Department.”

The article states that a “renewable energy power plant was built on around a 300 square meter lot on the lower part of the Yalu River” and that “The Electricity Department built around 3,600 solar panels, electricity transformers, and electric cables to ensure the continued, self-sufficient supply of electricity.”

The source told Daily NK that the Workers’ Party of Korea (WPK) and government officials in North Pyongan Province made the decision to embark on the construction of the new power plant. Officials emphasized the use of renewable energy and new ways to supply electricity to the province.

A separate source in North Pyongan Province said that the decision to move forward with the project led to the construction of an “electricity base” with wind power and solar panels in the Sinuiju area.

“They are now moving forward with expanding the existing infrastructure by four-fold,” he said.

[…]

The Rodong Sinmun published an article on March 20 entitled “Let’s Imitate Them [North Pyongan Province’s Electricity Department] and Widely Develop and Use Renewable Energy.” The article states that the Electricity Department in North Pyongan Province “recently constructed a massive renewable energy power plant that is supplying electricity to important areas in Sinuiju and the local people.”

Source:
Renewable energy power plant built for Sinuiju modernization plans
Mun Dong Hui
Daily NK
2019-06-21

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DailyNK on Xi Jinping’s June 2019 and domestic economic impacts

Thursday, June 20th, 2019

Benjamin Katzeff Silberstein

Daily NK:

Chinese President Xi Jinping’s visit to North Korea on June 20-21 has garnered significant international interest on the impact it will have on the lives of ordinary North Koreans, who continue to suffer from the impact of international sanctions.

There is also interest in the “bag of gifts” that Xi will bring to North Korea for his upcoming visit. Past Chinese premiers visiting North Korea typically brought gifts for the regime: Jiang Zemin promised food, fuel and manure to North Korea during his visit in 2001, while Hu Jintao promised two billion USD in aid in 2005.

One potential reason that Xi has not made an earlier trip to North Korea may be because China’s hands are somewhat tied in regard to such gifts while international sanctions remain in place. In all likelihood, however, the fact that Xi has decided to make the trip suggests that China intends to provide economic aid to the country.

Some observers say that China will have difficulty providing aid that goes outside the boundaries of international sanctions. There may be limits to only providing humanitarian aid such as food or manure as a show of sincerity.

Korea Institute for National Unification (KINU) researcher Cho Han-bum told Daily NK on June 18 that “China will not be able to lift the sanctions or become a game-changer on the international stage in regards to North Korea,” but that “it wants to influence events on the Korean Peninsula so it will try to maintain a strong relationship within the framework of international sanctions.”

“China can provide large shipments of food and other necessities,” Cho also noted. “They might try to strengthen the bilateral relationship by increasing human exchanges and tourism to North Korea.”

While China has acquiesced to many of the international sanctions imposed on North Korea, the country may aim to improve the lives of the North Korean people given that it publicly opposes sanctions that damage the civilian economy.

“The Chinese government believes that the sanctions are damaging North Korea’s civilian economy while failing to denuclearize the country,” Gyeongsang National University professor Park Jong-chul told Daily NK when asked for comment. “I predict that China will drastically increase humanitarian aid that does not run afoul of international sanctions.”

Park opined that Xi’s visit to North Korea could lead to more human exchanges, which could in turn positively impact the North’s civilian economy. “Many more Chinese business people, scholars, students and tourists will go to North Korea […] this could soften the impact of the sanctions on North Korea while still abiding by them,” he said.

Xi’s visit to North Korea could also change the atmosphere in the Sino-North Korean border region. China could scale back its strong-armed efforts to eliminate smuggling in the area or even allow North Korean workers to return to China.

Daily NK reported in January that smuggling was widespread in the border region after North Korean leader Kim Jong Un’s fourth visit to China. A Chinese source also reported that large numbers of North Korean workers were seen heading into China after Kim’s first visit to the country in March last year.

“The Chinese government is cracking down on smuggling, but tends to soften its stance during and after summits,” Park said. “There is an increasing number of North Korean workers at companies in Beijing and other places in China […] The Chinese government seems to be developing a visa that can allow these workers to stay under non-worker visas.”

Source:
Impact of Xi’s planned visit to North Korea on the country’s civilian economy
Ha Yoon Ah
Daily NK
2019-06-20

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Farmers in North Korea sent to labor camps for stealing potato seeds

Tuesday, June 11th, 2019

Benjamin Katzeff Silberstein

Perhaps this wouldn’t be a problem if farmers worked for themselves to a greater extent, rather than primarily to fill the state quota…

Daily NK reports:

A farmer at a potato farm in Yanggang Province was recently sent to a forced labor camp for stealing seeds meant for planting, a Daily NK source reported on June 3. The incident provides a glimpse into the difficulties faced during the potato planting season  in May.

The farm, a major producer of potatoes located in Taehongdan County, Ryanggang Province, is in an area where locals plant potato seeds for a two-week period starting in early May to ensure the seeds are planted on time. Potatoes in North Korea are important because they can replace rice and wheat and are the major source of calories for some parts of Ryanggang Province.

North Korean farmers refrain from removing the germinal disk from potato seeds and plant potatoes whole to increase yields. The state-run publication Rodong Sinmun recently reported that potato production reached record levels last year.

“There have been many cases where farmers have stolen potato seeds during the ‘potato planting battle’ period,” a source in Ryanggang Province told Daily NK. “The authorities made an example out of two farmers who stole seeds by sending them to a disciplinary labor center for six months.”

At larger farms in Taehongdan County, farmers use trackers to plant whole potatoes. Farmers working on smaller farms, however, plant the potatoes themselves. The potatoes need to be planted 4-5 centimeters apart, but farmers frequently do not follow this rule. Instead, they plant the potatoes farther apart and then hide the potato seeds that are leftover underground to take home later.

“Farm managers have worried constantly about this issue, so they have told farmers that stealing seeds is tantamount to destroying the Party’s agricultural policies,” said the source.

Poorer farmers, however, are faced with hunger during the planting season so they steal potato seeds regardless of these warnings and even sell the seeds in local markets, the source said.

Taehung-dan is, of course, the site for Kim Jong-il’s famous speech on the “potato revolution“.

Full article:
North Korean farmers sent to labor camp for stealing potato seeds
Kim Yoo Jin
Daily NK
2019-06-11

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Seoul wires $8 million to North Korea in humanitarian aid

Tuesday, June 11th, 2019

Benjamin Katzeff Silberstein

Note: this is not a lot of money in context. It covers only a small part of what WFP and others estimate as the funding need.

Yonhap:

South Korea on Tuesday sent a pledged donation of US$8 million to U.N. agencies to support their efforts to provide assistance to North Korean women and children in need, the unification ministry said.

Last week, the Seoul government endorsed the donation plan for the World Food Programme (WFP) and the U.N. Children’s Fund (UNICEF) for their projects to support the nutrition of children and pregnant women in North Korea and address their health problems.

Of the total, $4.5 million was allocated to the WFP and the remainder to UNICEF.

The money was remitted to the agencies Tuesday afternoon, according to the unification ministry.

A ministry official said earlier in the day that it will take more time before the money will be actually spent on the agencies’ projects in North Korea, adding that they are working on reducing the time before its implementation in consideration of the urgent need of many North Korean people.

Article source:
Seoul wires promised money to U.N. agencies for N.K. projects
Yonhap News
2019-06-11

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North Korean media reports drought impacts on rice harvest

Wednesday, June 5th, 2019

Benjamin Katzeff Silberstein

Yonhap:

North Korean state media highlighted worsening water shortages in one of the country’s major rice-producing regions on Wednesday, raising worries about possible harm to this year’s harvest.

“Not a few areas in the South Hwanghae Province are now facing serious water shortage caused by a combination of various factors,” the Rodong Sinmun, the official newspaper of the North’s ruling party, said in an article.

The paper said that the water reservoirs in some areas of the province are falling below normal levels, making it hard for farmers to plant rice in their paddies as scheduled.

The North’s official Korean Central News Agency also reported that the drought is hindering rice-planting efforts in South Hwanghae Province, expecting that precipitation will likely stay low until mid-June.

Hwanghae Province is known as one of the largest rice-producing areas for North Korea. The apparently ongoing drought in North Korea is feared to aggravate the already strained food supply in the impoverished state.

Article source:
N. Korean media highlight drought in major rice-producing province
Yonhap News
2019-06-05

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