Archive for September, 2022

North Korean rice prices stabilize in September

Friday, September 23rd, 2022

By: Benjamin Katzeff Silberstein

Following a quite usual pattern, rice prices have stabilized in the past few weeks after climbing during July, the country’s “lean season” in food. Daily NK reports:

North Korean rice prices appear to be falling this month after climbing past KPW 6,000 a kilogram in late July.

According to Daily NK’s regular survey of North Korean market prices, a kilogram of rice in Pyongyang cost KPW 5,600 as of Sept. 18. This is about 11% less than it cost on July 26, when a kilogram of rice climbed to KPW 6,280.

In fact, the price of rice in Pyongyang has continued to fall since the July 26 survey.

In other regions such as Sinuiju, North Pyongan Province and Hyesan, Yanggang Province as well, rice prices have continued to drop, falling 8 to 12% since late July.

It appears rice prices are falling from July because double-cropped wheat, barley and potatoes have been harvested, and because the authorities provided some North Koreans with unglutinous rice, glutinous rice, wheat flour and other foodstuffs earlier this month to mark the anniversary of North Korea’s founding on Sept. 9.

However, the provisions were primarily aimed at Pyongyang residents and cadres of state agencies. Ordinary people in the provinces received nothing in particular.

According to the source, in some regions such as Yanggang Province, rice of relatively poor quality is currently circulating in markets. Considering the poor state of the musty, moldy rice, it appears some low-quality rice in military storage found its way into markets after it was given to soldiers.

North Korean authorities recently ordered officials dispatched overseas to obtain grains such as unglutinoius rice, corn and soybeans. However, the authorities have yet to provide the imported grains to ordinary people.

According to another source in the country, some military units have gone directly to Nampo, where the imported grain is being stored, to load up on unglutinous rice.

(Source and full article: Seulkee Jang, “N. Korean rice prices fall after climbing past KPW 6,000 per kilogram in late July,” Daily NK, 23 September, 2022.)

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Is the North Korean economy in crisis territory?

Thursday, September 8th, 2022

By: Benjamin Katzeff Silberstein

Is the North Korean economy in a crisis following years of tough sanctions and the Covid-19 border closure? In a new report, the Bank of Korea’s answer is yes. They point to factors such as vast price increases on several basic goods to show that shortages have led to a price inflation virtually across the board for crucial consumer products:

The price of sugar in North Korea has multiplied by a factor of 8.3 between 2017 and late June of this year, from 5,201 won to 43,000 won per kilogram. During the same time period, the price of flour grew 3.7 times in the country as well, from 5,029 won to 18,700 won per kilogram.

Sugar and flour are two of the main food products North Korea imports from other countries. The extent to which their prices jumped in North Korea exceeds what might be observed in South Korea today due to high inflation. What could have happened in North Korea in the past five years to occasion such a surge in prices?

On Monday, the Bank of Korea published a report titled “North Korea’s Economy in the Past Five Years and Its Future Outlook,” which pointed to how the country’s economic environment changed during the time period. In a nutshell, the report argued that North Korea’s economy has entered yet another period of crisis after the 2000s, when its economy grew, following the 1990s, when the country experienced an economic crisis and a famine, also known as the Arduous March. North Korea’s gross domestic product (GDP) fell by 2.4% on average every year from 2017 to 2021 and is estimated to have dropped by a total of 11.4% during this time period.

What prompted the crisis in North Korea were economic sanctions against the country as well as border closures due to COVID-19.

(Source: Park Jong-O, “Why the price of sugar went up 726% in N. Korea over the last 5 years”, Hankyoreh, September 6th, 2022.)

Broadly speaking, given the data available, it is difficult to draw any other conclusion. At the same time, it is crucial to keep a few things in mind. First, much of the economy is adapted to a situation with very little foreign trade, because even in a normal year, North Korea’s external trade is exceptionally small compared with most countries in the world.
Second, there’s like to be considerable regional variation in the economic situation. Transportation inside North Korea has improved considerably over the last 10-15 years but getting goods from, say Hyesan in the northeast to Pyongyang, or a southern city like Sariwon, is still difficult, complicated and time consuming. So we are not necessarily talking about one, unified market with similar conditions across the country, but rather about a very fractured system.

Third, the word “crisis” in the context of the North Korean economy comes with very serious connotations since the famine of the 1990s. But we are decidedly not talking about a situation with mass starvation, and the Bank of Korea acknowledges this. Because of the expansion of the market system, the economy can respond very differently to shortages today than it could in the 1990s and early 2000s. Consumers can and likely have switched to less desired goods that can be procured and produced domestically. Both flour and sugar can, after all, to some extent be substituted for less desired but more easily available goods. We’ve also seen an increase in the price over corn over rice, which exemplifies this well: when the more desired good (rice) becomes more expensive, a greater number of people switch over to corn. This does suggest economic conditions have worsened, but not necessarily that they are disastrous.

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North Korea seeking rice donations abroad

Wednesday, September 7th, 2022

By: Benjamin Katzeff Silberstein

I’m not convinced the main point of this news report is that North Korean state representatives have reached out specifically to Indian representatives. Rather, this suggests a much wider campaign, with North Korean diplomats and other functionaries posted abroad ordered to scout around for possible donations from abroad. Voice of America:

VOA’s Korean Service has learned that Pyongyang has turned to India for rice, its staple food, which it usually imports from China.

Manpreet Singh, executive president of the Indian Chamber of International Business, an organization that helps small to midsize Indian companies expand globally, told the Korean Service in an August 30 email that North Korean Embassy officials visited the organization in New Delhi.

“We have been approached by the Embassy to look at possibilities for donations of rice” as “floods destroyed most of the crop,” said Singh.

North Korea’s U.N. Mission in New York City did not respond to VOA Korean Service’s questions about its food situation and whether it is seeking outside aid. North Korea has dismissed South Korea’s offer of economic aid in exchange for its denuclearization, a deal outlined in South Korean President Yoon Suk Yeol’s “audacious initiative,” introduced August 15.

(Source and full article: Jiha Ham, “North Korea Turns to India for Rice Amid Food Shortages,” Voice of America, September 7th, 2022.)

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Chinese region near North Korean border suffers from lockdowns

Thursday, September 1st, 2022

By Benjamin Katzeff Silberstein 

New York Times recently ran an interesting dispatch from Shenyang in northeastern China, about an hour’s high-speed train ride from North Korea. This report highlights something important: while trade with North Korea is negligible for China as compared to the country’s total trade volume, North Korea as a trading partner does matter for the Chinese border regions specifically:

….And in a region often referred to as China’s Rust Belt, the local economy had already been shaky for years.

Possibly the main problem, though, is that Ms. Wen’s primary customer base has virtually evaporated.

“With North Korea closed because of the virus, they can’t come or go at all,” she said from behind the counter of her store in Shenyang’s Koreatown, where signs advertising steep discounts on imported South Korean styles had done little to draw in shoppers. “Before, we’d have maybe dozens of North Korean customers every day. Now you don’t even get 10.”

China’s continuing strict coronavirus controls have battered local economies across the country. But Shenyang has endured a double blow. Just 150 miles from the North Korean border, it is suffering not only from the restrictions in China, but also from those imposed by the even more isolated country next door.

(Source and full article: Vivian Wang, “Lockdowns in China, and North Korea, Bring Double Blow to Bridge City,” New York Times, August 30th, 2022.)

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