Archive for the ‘International trade’ Category

North Korean imports from China turning toward food

Thursday, November 3rd, 2022

By Benjamin Katzeff Silberstein

The first items North Korea imported from China when railway freight trade started back up were mainly industrial goods, but lately, imports appear to have shifted more toward foodstuffs. Daily NK

According to a Daily NK source in China last Friday, freight trains have been departing every morning from the Chinese city of Dandong for the North Korean city of Sinuiju since Sept. 26.

From late September to early October, the freight cars have been mostly laden with aluminum window frames, tiles, living room lights and other construction supplies, but from mid-October, the trains are carrying a wider range of cargo.

Trains entering North Korea still carry construction or interior supplies such as aluminum window frames, wood for furniture and sawdust, as well as medical supplies like masks and antibiotics. However, since mid-October, foodstuffs have accounted for a far higher share of imports, so much so that over half of freight cars have been laden with various food items.

In fact, the items now accounting for a greater share of North Korean imports by freight trains from China include soybean paste, soy sauce, red pepper powder, sugar, seasonings, vinegar, garlic soybeans and other items. In particular, imports of foodstuffs needed to make kimchi have reportedly increased with the start of kimjang, or the kimchi-making season.

However, the freight trains have yet to begin carrying grains such as rice or wheat flour.

(Source: Seulkee Jang, “N. Korea is now focusing on importing food from China,” Daily NK, November 1st, 2022.)

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North Korea reportedly sending more workers to occupied Ukraine

Wednesday, October 26th, 2022

By Benjamin Katzeff Silberstein 

I want to emphasize that this is all far from confirmed and that Daily NK, by the nature of their work, often has to rely on a very small number of sources. Nonetheless, this report suggests authorities in North Korea are preparing to send additional workers to Russian-occupied Ukraine, other than those that have already supposedly been selected. Although the move itself is political in context, as the source notes in the article, reasons are likely mainly financial for North Korea.

North Korea plans to select additional laborers to send to Russian-occupied regions of eastern Ukraine. In fact, Pyongyang plans to send about 300 people, with the primary goal being to earn foreign currency.

A source in North Korea told Daily NK on Monday that the country plans to start the second round of selections on Nov. 1. He said the authorities have issued “recommendation rights” to each Cabinet ministry and committee, and that each workplace must submit recommendations to the Workers’ Party’s Cadres Department (human resources department) by the end of November. 

Daily NK previously reported that North Korea had selected personnel to dispatch for reconstruction efforts in regions of eastern Ukraine occupied by Russia.

“Through the second round of selections, North Korea plans to organize a total of six teams [to be sent to Russian-occupied areas of Ukraine],” said the source. “About 50 people will be in each team, so it seems about 300 people will be chosen nationwide. Considering the first round of selections [about 800-1,000 people], the country plans to send a large number of people overseas.”

The source said people in Pyongyang or with connections to the Cadres Department are not inquiring about the location — presumably because they already know about Ukraine — nor do they want their family members to apply for the job.

“Since Pyongyang residents aren’t going, the authorities are giving as many recommendations as they can to provincial residents,” he said.

The source further explained that officials in the cadre departments of major cities like Pyongyang, Nampo and Pyongsong complain that this is the first time in 30 years that they have seen people avoid a chance to go overseas. They say this is a marked contrast with the old days, when people needed official recommendations to go abroad.

On the other hand, provincial residents reportedly demonstrate no real hesitation to apply. The source said volunteers do not believe they are going to die, even if eastern Ukraine is a conflict zone.

“Some provincial residents optimistically believe that the state would never drive them to their deaths,” said the source. “It seems they think the government will conclude a good contract with Russia so that they can work in the safest place possible.”

(Source: Mun Dong Hui, “N. Korea to select additional laborers to work in Russian-occupied regions of Ukraine,” Daily NK, October 26th, 2022.)

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North Korean trade with China in September highest since Covid-19 began

Tuesday, October 25th, 2022

By: Benjamin Katzeff Silberstein 

The latest figures are out for China-North Korea trade. Overall, trade in September was at its highest since Covid-19 began, which is particularly significant considering that rail traffic, one of the most central routes for goods, only started back up late that month. Total trade stood at $142.7 million. In January 2020, the same figure was slightly under $200 million. This was already a fairly low figure, but one that would have likely climbed steadily were it not for Covid-19.

$14.2 million consisted of exports, with the vast majority being imports. North Korea’s main export goods were iron ore and other mineral- and mining-related products.

North Korea mainly imported medicines and industrial goods, with truck tires being its main import. It is a crucial good for most sectors that depend on domestic transportation and the shortage of tires (whose domestically produced quality is low) has likely caused considerable difficulties.

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North Korean workers selected to go to Russian-occupied Ukraine, will go in November

Friday, October 21st, 2022

By Benjamin Katzeff Silberstein

I don’t think we’ll fully know how solid and extensive plans are for the dispatch of North Korean workers to Russian-occupied territories in Ukraine until “boots” actually start to arrive on the ground, if even then. A recent report by Daily NK says that authorities have finished selecting workers who will go. It suggests that any contingent that may be sent will be fairly small — 800 to 1,000 — and that they will begin to arrive in November:

North Korea has completed the process of selecting workers to take part in reconstruction efforts in Russian-occupied parts of eastern Ukraine, with plans to send the workers to the region in early November.

A source in North Korea told Daily NK on Monday that the authorities carried out the selection in Pyongyang from July, and that “800 to 1,000” workers were recruited.

Daily NK reported in August that North Korea had planned to send some North Korean workers already in Russia to the Donbas, and that North Korean authorities had also selected workers in North Korea to dispatch to the region.

In fact, Daily NK’s source said the newly selected workers in North Korea would be sent in turns in small teams of 30 to 60 people.

“No firm date has been selected, but they plan to send the selected workers in early November as they select new workers,” he said.

This suggests that North Korea — having weighed when to send the workers while carefully watching the progress of the war — is preparing to send personnel in early November, and also intends to conduct a second round of selections of workers to send to the Donbas.

As for how the workers would get where they need to go, officials are discussing plans to send them by train from the northeastern city of Rason, or by flying them aboard an Air Koryo flight to Vladivostok. Also reportedly being discussed is a plan to send them to Moscow or Saint Petersburg via Beijing.

The source said China has “decided to feign ignorance” since the workers are only transiting through the country, not stepping foot in it.

“North Korea, China and Russia have agreed that sending North Korean workers to Russian-occupied areas would not constitute a violation of sanctions,” he said.

The source added that since sending the workers to Russia through Beijing would cost about the same as sending them through Vladivostok, officials are largely considering sending the workers through the Russian city.

(Source: Mun Dong Hui, “N. Korea finalizes selection of workers to join reconstruction efforts in Russian-occupied parts of Ukraine,” Daily NK, October 21st, 2022.)

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North Korea-China trade officially reopened

Monday, September 26th, 2022

By Benjamin Katzeff Silberstein

On September 26, a spokesperson for the Chinese Foreign Ministry officially stated that railroad traffic between China and North Korea would restart yet again, after the brief opening and sudden cancellation five months ago. The same say, a freight train crossing the border was caught on video. Bloomberg:

Foreign Ministry spokesman Wang Wenbin said Monday at a regular press briefing in Beijing the cargo rail link between the China and North Korea is reopening, after service was halted in April as part of measures to control Covid.

“The two sides will continue to strengthen coordination to ensure the steady and secure transport of goods, and contribute to friendly relations between China and the DPRK,” Wang said, referring to North Korea by its formal name.

The rail connection between the city of Dandong in China and Sinuiju in North Korea is Kim’s main link to China, his country’s biggest trading partner by far. Reopening the trade route could take pressure off Kim to return to stalled nuclear disarmament talks with the U.S., where the Biden administration is dangling the prospects financial rewards in exchange for steps to wind down its atomic arsenal.

The link was closed in 2020 near the start of the pandemic when Kim shut the borders to prevent the coronavirus from entering, and was briefly reopened in January of this year. Video on social media on Monday showed a freight train that appeared to be crossing from the Chinese side into North Korea.

(Source: “China, North Korea Restore Rail Link on Kim’s Key Trade Route,” Bloomberg News, September 26th, 2022.)

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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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North Korea denies weapons sales to Russia

Thursday, September 22nd, 2022

By Benjamin Katzeff Silberstein

As per New York Times earlier this fall, US intelligence believes North Korea has sold weapons to Russia in aid of its attempt to invade Ukraine. North Korean authorities, for what it’s worth, have publicly denied this. Judging from the evidence reported so far, it doesn’t yet seem fully confirmed that any such weapons trade has in fact taken place. There’s little reason to doubt it’s been discussed — Russia is probably weighing all conceivable options for arms purchases and North Korea isn’t usually a picky seller. AP:

In a state media report Thursday, an unnamed North Korean defense official told the U.S. to stop making “reckless remarks” and to “keep its mouth shut.” Biden administration officials earlier this month confirmed a declassified U.S. intelligence assessment that Russia was in the process of purchasing arms from North Korea, including millions of artillery shells and rockets, as Moscow attempts to ease severe supply shortages in Ukraine worsened by U.S.-led export controls and sanctions.

The North Korean statement came weeks after Moscow described the U.S. intelligence finding as “fake.”

North Korean arms exports to Russia would violate United Nations resolutions banning the country from importing or exporting weapons.

(Source: Kim Tong-Hyung, “North Korea denies sending arms to Russia amid Ukraine war,” AP News September 22nd, 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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