Barbara Demick wrote an interesting piece in the New Yorker this week which captures first-hand stories about how the DPRK’s currency reform affected local families (not well).
Here is her article in PDF format.
Archive for the ‘Food’ Category
Demick’s “Nothing Left”
Thursday, July 15th, 2010DPRK leases squid rights to Chinese
Thursday, July 15th, 2010According to the Joong Ang Ilbo:
North Korea is allowing Chinese fishermen into its territorial waters on the East Sea in exchange for cash, according to Seoul government officials.
The North Korean and Chinese governments recently agreed to allow squid boats from China to fish in North Korea’s waters, said a Seoul official who declined to be named.
About 250 Chinese boats are operating near Najin [Rajin/Rason] and Chongjin, two port cities in North Hamgyong Province, a northeast coastal area. It is the first time such a large number of Chinese crafts have been allowed to operate in North Korea’s seas, he said.
North Korea is collecting about 250,000 yuan ($36,913) for each boat for 2010, meaning the impoverished country is expected to earn about 62.5 million yuan in the deal.
“Many of the North’s fishing boats are extremely outdated and are experiencing intense fuel oil shortages, while squid prices in China have gone up due to supply shortages,” the official said. “So each side’s interests have been satisfied.”
North Korea has been hungry for more cash to finance state projects, including a so-called Pyongyang modernization project that involves paving major roads, upgrading railway networks and refurbishing urban streets.
“They are trying to secure more foreign currency through a commercial deal that is not subject to UN Security Council Resolution 1874,” said the official, referring to the UN economic sanctions adopted in June 2009 that involve trade restrictions, cargo inspections and other limits on financial transactions.
The Chinese fishing boats operating in the North’s sea mostly come from Dalian and Dandong, two ports in China’s northeastern coastal region.
“The fishing rights the Chinese boats have secured cover most of the North’s territorial waters on the East Sea,” said another Seoul official. The official expressed concern about possible overfishing by the Chinese, which may affect South Korean fishermen as well.
“Once squid start moving to the south, the Chinese fishing boats will travel farther south, possibly all the way down to Heungnam, Sinpo and Wonsan,” said another South Korean government official, referring to the North’s port cities in South Hamgyong Province.
Read the full article below:
North Korea leases out its squid beds to China
Joong Ang Ilbo
Chung Yong-soo
7/15/2010
Food price update
Wednesday, July 14th, 2010According to the Daily NK:
As previously reported, the price of rice in North Korea, which declined in March, has started soaring again. But this rice price fluctuation looks different from those of previous years.
According to a source from North Hamkyung Province, rice in Hoiryeong market was between 450 and 500 won per kilogram until late June, but on July 13th it hit 750 won. Corn rice is also more than 400 won now.
At the same time, one Yuan is now worth 150 won.
Since the mid-2000s when the market economy started to spread, rice prices have risen during the spring poverty season in April and May. And then, in around late June, when potatoes and barley are harvested, prices stabilize, and then, in September, they decline in expectation of the harvest.
Therefore, traders in the jangmadang generally buy rice and other grains in November and December and then sell them in the jangmadang during April. Cadres also use that regular cycle of food price rises and falls to profit by buying rice late in the year and releasing it for a higher prices during the next spring. Therefore, poorer people also try to get rice and grain in winter time.
However, since the currency redenomination, the fluctuations have changed.
Immediately after the redenomination, the authorities released a measure shutting down the markets, so in January rice prices rose by around 60 times compared with before the redenomination. The markets have been open once again since February 5th, but food prices remained unstable through mid-March. That was because people did not buy grains until March, at which time demand promptly far outstripped supply.
In April this year, there was a limited amount of food distribution and some residents in some districts of Pyongyang received corn, which they were supposed to receive in May and June, in advance. Additionally, as a result of Kim Jong Il’s visit to China, rumor had it that a large amount of food would be delivered, so rice prices were relatively flat.
However, when the rumor turned out to be empty, a decree was handed down to lower units in May ordering food self-reliance at the local level. This only intensified anxiety about the food situation.
More serious problems may come in July and August, monsoon season. If the weather affects farming, anxiety about food for the last half of the year will grow. Make things worse, there was cold-weather damage to farming early this year, so a lost harvest is clearly going to be on people’s minds.
On this, one source said, “Food wholesalers predict that prices will go on rising until the harvest in August. And when rising food prices influence general products, big troubles can come, like they did in January of this year.”
Click image to see Hoeryong market prices.
Read the full story here:
Food Price Cycle Twisting in the Wind
Daily NK
Yoo Gwan Hee
7/13/2010
DPRK-PRC trade up 18.1% from January to May 2010
Tuesday, July 13th, 2010Institute for Far Eastern Studies (IFES)
NK Brief No.10-07-08-2
7-8-2010
As inter-Korean commerce has all but dried up in the wake of the Cheonan incident, trade between North Korea and China appears to have continued to grow. According to Chinese customs statistics released on July 6, trade with North Korea from January to May amounted to 983.63 million USD; 18.1 percent more than the 833.07 million USD reported for the same period last year.
North Korea imported 727.192 million USD-worth of Chinese goods (29 percent increase over the same period last year), but exports dropped by 4.9 percent, amounting to only 256.438 million USD. This indicates a 60 percent increase in North Korea’s trade deficit with China, which was 470.757 million USD in the first part of 2009. With South Korean sanctions against the North halting all inter-Korean trade outside of the Kaesong Industrial Complex following the sinking of the Cheonan, it is expected that Pyongyang will become even more economically dependent on Beijing.
During this period, crude oil accounted for most of North Korea’s imports from China, as Pyongyang bought 254,000 tons (slightly more than the 247,000 tons in early 2009). However, due to rising international fuel prices, this oil cost the North 157.097 million USD, a 76 percent increase over what Pyongyang spent during this period last year.
In addition, rice (24,400 tons), corn (31,400 tons), beans (20,500 tons), flour (34,000 tons) and other necessary food imports totaling 11,300 tons reflected a 41 percent increase over the same period in 2009. The cost of fertilizer imports also jumped sharply, amounting to 81,943 tons, or 115.6 percent more than the 38,004 tons imported from January to May 2009. Increasing imports of food and fertilizer are a result of the growing agricultural difficulties being faced in the North. Based on current prices, aviation fuel imports also grew by 46.8 percent, freight trucks by 98.7 percent, automobile fuel by 47.4 percent, and bituminous coal by 137 percent.
The top ten official imports of Chinese goods by North Korea were as follows: crude oil (21.6 percent); aviation fuel (3.1 percent); freight trucks (2.9 percent); automobile fuel (2 percent); bituminous coal (1.9 percent); fertilizer (1.8 percent); beans (1.6 percent); flour (1.6 percent); rice (1.5 percent); and corn (1.1 percent).
North Korea’s exports to China were mainly underground natural resources. The top ten exported goods were: iron ore (17.1 percent); anthracite (16 percent); pig iron (9.6 percent); zinc (5 percent); Magnesite (3.6 percent); lead (2.4 percent); silicon (2.3 percent); men’s clothing (2.2 percent); frozen squid (2.1 percent); and aluminum (1.9 percent).
Rice Prices on the Rise
Tuesday, July 13th, 2010According to the Daily NK:
The price of rice in the three northern provinces of North Korea (Yangkang, North and South Hamkyung) has risen above 750 won for the first time in four months.
A source from Yangkang Province told The Daily NK yesterday, “Chosun rice prices have reached a high of 750 won in the Hyesan jangmadang,” and added, “Rice prices in Hyesan, Wiyeon and Chundong in Yangkang Province are at a similar level.”
In Chongjin, North Hamkyung Province, on around the 5th of this month the price of a kilo of rice hit 700 won. If the inflationary trend were to continue, by late July or early in August, it could have surpassed 1,000 won.
That said, the future is hard to predict. Rice immediately after the redenomination could nominally be bought for 20 won per kilo, but by mid-March this year was setting people back more than 1,000 won. However, the next month, prices had dropped back to around 500 won.
The source explained that the reason for the current situation may be the rising exchange rate. One Yuan was 110 won until last month, but is currently worth more than 150 won. North Korean exchange rates tend not to go down without intervention, so without any decisive measures by the authorities to stabilize rice prices, the result will be a rise in prices overall.
Hyesan in Yangkang Province is one of the comparatively free places where traders can visit China once every two weeks or so; therefore, rice prices were quite fluid. However, the reason why rice prices even in this city continue to rise is that there is not enough rice being imported, while exchange rates are rising inexorably.
The North Korean authorities once tried to lower prices by releasing rice from military stores. However, the effect was fleeting.
According to the source, the Hyesan jangmadang currently opens at 3PM and closes at 7PM due to agricultural activities, but trading is unrestricted. No regulations on price or usage of foreign currency are in place, but trade in industrial products remains slow due to the dire economic status of the majority of residents.
The authorities are trying to emphasize economic achievements in order to promote Kim Jong Eun’s succession, but the economic situation people are facing is far from satisfactory.
Read the full story here:
Rice Prices on the Rise
Daily NK
Shin Joo Hyun
7/13/2010
KPA discipline along the Chinese Border
Tuesday, July 13th, 2010According to the Telegraph:
Previously considered to be among the regime’s most important assets, the North Korean People’s Army has always been well provisioned in order to ensure the troops remain loyal.
But a poor harvest and the disastrous revaluation of the North Korean currency in November of last year has worsened the nation’s already dire economic straits.
Defectors have claimed that they were required to survive on noodles made of ground corn and that meat or fish were a luxury, a journalist for Japan’s Asahi Shimbun reported from the Chinese city of Shenyang.
On one stretch of the border, Chinese troops apprehended five North Korean soldiers in May alone. Prior to the sinking of the South Korean corvette Cheonan in March, allegedly by a torpedo fired from a North Korean submarine, it was rare for troops to be taken into custody on the Chinese side of the Yalu River.
The defectors have claimed that senior members of the party and the armed forces were stockpiling provisions, another indication that the regime is steeling itself for a military confrontation.
“In the past there have been cases of North Korean troops crossing the border and plundering Chinese farms for their food, which they then took back to their posts in the North,” Kim Sang-hun, a human rights activist in Seoul, told The Daily Telegraph.
However, these soldiers chose to return to the North with the supplies.
Robert Dujarric, a professor of international relations specialising in North-East Asia, said the situation in North Korea was “very bad” at present, due to the poor harvest, but a more dramatic indicator of the scale of the problem would be if military officers or members of elite military units opted to follow in the footsteps of these soldiers.
The defectors apprehended by the Chinese were reportedly returned to North Korea, where they face execution.
Read the full story here:
North Korean soldiers defect to China fuelling fears of imminent military clash
Telegraph
Julian Ryall
7/12/2010
DPRK aid update
Sunday, July 11th, 2010According to KBS:
Red Cross to Help NK Prepare for Monsoon Season
The International Federation of Red Cross and Red Crescent Societies reportedly plans to allocate around nine million dollars this year for projects to support North Korea ahead of the monsoon season.
Radio Free Asia said Wednesday that the Red Cross plans to select 31 towns that are considered to be the most vulnerable to natural disasters and will provide them with up to nine-and-a-half million dollars for preparedness training and to build dams and reservoirs.
The report said the international organization’s plans aim to help some eight-point-two million North Koreans this year.
The Red Cross also plans to form a committee on preventing natural disasters in the North from this month until mid-September, when the region is affected by monsoon rains.
And according to another KBS story:
WFP to Spend $2.8 Mln on NK Food Aid
The U.N. World Food Program (WFP) has decided to spend nearly two-point-eight million U.S. dollars on food aid for North Korea.
The funding for the aid was provided by the Swedish government.
Radio Free Asia quoted WFP global media coordinator Greg Barrow as saying that his agency will use the Swedish donation to help North Korea, which is in desperate need of emergency food aid.
Barrow said that the North will require even more donations from countries around the world, given that the current amount of food aid for the impoverished nation is expected to run out by September.
Read the full stories here:
WFP to Spend $2.8 Mln on NK Food Aid
KBS
7/7/2010
Red Cross to Help NK Prepare for Monsoon Season
KBS
7/7/2010
The All-North Korean Pig Farming Sector
Saturday, July 10th, 2010Accroding to the Daily NK:
The 8th issue of Rimjingang, the periodical written by North Korean underground journalists, sheds light on North Korea’s private livestock industry.
One article, “Livestock Industry Developing from Private Means of Living into Private Enterprise,” describes how pig farming has developed during and since the famine period. It explains how, under the functioning planned economy, the “livestock industry” amounted to each household unit raising pigs to sell on the side, but now the planned economy is little more than a distant memory and the livestock sector has been specialized and systematized into sectors; breeding, butchery, distribution and sale.
That is why in North Korean markets 90% of goods are Chinese, but 100% of pigs and pork is North Korean.
Under the planned economy, roughly 20% of people in rural areas privately raised pigs and sold them to state meat procurement stores for two kilograms of corn per kilo of meat, the report notes. But from the mid 1980s, procurement stores bought them for cash, so competition grew and eventually the stores had to close due to increasing prices and their own lack of ready cash. Since the 1990s, distribution has stopped and more than 50% of people have started raising pigs in more specialized ways, it adds.
The report goes on to explain that during the March of Tribulation people figured out that their salaries, even when received, represented a mere tiny fraction of the labor value they could realize by trading illegally in the jangmadang. Many were unwilling to put up with it.
“Going through the March of Tribulation, the profit motive through the market has opened the door to new food lives which the Leader cannot open with his slogan, ‘reform food lives with meat,’” the report asserts. “Now, since a powerful supply and demand system has been spontaneously established, anybody can afford to eat meat as long as they can earn money.”
“’Leave us alone!’ is the real voice of the people of Chosun,” the report concludes, adding that the phenomenon of the Chosun pig farming industry implies the clear potential to develop modern industry in North Korea.
The 8th edition of Rimjingang was published in Korean on June 30th.
Read the full story here:
The All-North Korean Pig Farming Sector
Daily NK
Yoo Gwan Hee
7/10/2010
Market prices stable
Thursday, July 8th, 2010According to the Daily NK:
Food price in North Korea at the end of spring held steady against food prices in March, and worries about an impending famine proved unfounded.
The Daily NK has looked at market food prices in Pyongyang, Shinuiju, and Chongjin over the first week of July. Everywhere, rice cost about 500 won while corn cost about 400 won. Compared to food prices in March, during the period when food is traditionally in the shortest supply, rice prices were much the same, whereas corn prices had risen by 50 percent.
A source inside North Korea explained, “Since the redenomination, some people have dropped from ‘middle income’ to ‘poor.’ As a result, demand for corn has increased, and that is the reason why corn prices have gone up. Some people still eat rice; however, many of those who used to eat rice are now feeding their families on corn.”
“Because of the planting battle, market hours were made shorter, but the market is running smoothly and food prices are stabilizing.”
However, the source conceded that the food security of senior citizens with no family support and homeless children seems to be very bad. The source said some of these people are indeed dying of malnutrition and disease, though not outright starvation.
So, while the food supply situation in North Korea is not in unusually poor shape, it seems that the aftereffects of last year’s redenomination are still taking effect,
Corn prices have increased by almost 100 won on average in the last month, and flour prices have also increased by about 200 won.
However, the price of fuels such as gasoline and diesel either remained the same or decreased slightly. Gasoline remains at 900 won, which is a hundred won less than it was in May. Diesel remains at 400 won, which is 200 hundred won less than it was.
Since last year, North Korea has been pursuing various construction projects as part of its goal of building a strong and prosperous state by 2012. It is possible that fuel heading for construction sites is finding its way into the markets.
Here is the data in JPG format!
Read the full story here:
Market Prices Holding Firm
Daily NK
http://www.dailynk.com/english/read.php?cataId=nk01500&num=6568
Yang Jung A
7/7/2010
Daily NK sources reject starvation reports
Tuesday, July 6th, 2010According to the Daily NK:
A report by aid organization Good Friends stating that widespread starvation is happening again in North Korea has been vehemently denied by inside sources.
In the June report, Good Friends, citing its own sources, asserted that the Chosun Workers’ Party had dispatched an investigation team to each area of the country following the June 7th Supreme People’s Assembly meeting, and that the teams had found up to two hundred people dead in each district of South Hamkyong Province.
According to Good Friends, “The first report from South Hamkyong reached the central party on June 18th, saying that for the four months from March to June in Hamheung, Heungnam and Sinpo, 100 or so people had died of starvation.”
However, a Daily NK source from Hoiryeong who recently visited Chongjin in North Hamkyong Province was incredulous when informed of the report, saying, “Who told you that? I have heard nothing about so many people dying of starvation in either Hoiryeong or Chongjin.”
Another source from Yangkang Province who said he visits Heochon County in South Hamkyong regularly said, “Although it is hard to live in South Hamkyong, people who made it through the ‘March of Tribulation’ know very well how to survive. There are newly harvested potatoes, and if you are really struggling then you can always eat herbs.”
NK Intellectuals Society (NKIS), a leading defector organization, agrees that the report is false, saying, “We have checked the report of widespread starvation in South Hamkyong with a resident of Danchon, and he has confirmed that no such thing has happened. Some elderly people with immune systems weakened by spring food shortages have died of disease, but that number is not more than ten or twenty in Danchon.”
Good Friends has tended to warn of impending mass starvation almost every year, but inside informants and the South Korean authorities often assert otherwise.
In a separate report, Good Friends also recently claimed that there was to be no more public distribution as of late last month, and that market transactions had been fully liberalized to allow the people to look after themselves.
The so-called “May 26th Measure”, Rev. Bomryun of Good Friends said at the time, was “reluctantly done as a result of a lack of the anticipated food aid from China after Kim Jong Il’s visit,” and claimed, “This time, the starvation cannot be dealt with over a short period of time, and might result in a larger number of deaths like in the mid-1990s.”
However, the actual existence of the May 26th Measure has not been proven, and markets in Sinuiju, Pyongyang, Hyesan and other main cities remain open from 10 AM to 6 PM as normal.
Won Sae Hoon, South Korea’s National Intelligence Service chief, also testified before the National Assembly’s Intelligence Committee last Thursday that North Korea probably has enough food overall to survive, saying, “This year, North Korea seems to have more than 4.3 million tons of grain, including its own production and imports, and food supply difficulties can be managed.”
Read the full story here:
Starvation Report Rejected by Sources
Daily NK
Shin Joo Hyun
7/2/2010
