Archive for the ‘Agriculture statistics’ Category

World oil and grain prices up, DPRK feels the pinch

Thursday, March 13th, 2008

Institute for Far Eastern Studies (IFES)
NK Bfrief No. 08-3-13-1
3/13/2008

International fuel and food prices are skyrocketing, while the cost of Chinese goods continues to rise, so that this so-called ‘triple-threat’ is sending shockwaves through the North Korean economy. In this year’s New Year’s Joint Editorial, North Korea championed the banner of a ‘strong and prosperous nation’, and declared that this year would focus on the economy, however this ‘triple-threat’ will likely make it extremely difficult for the North to meet its policy goals.

With oil prices peaking at over 110 USD per barrel, if these high oil prices continue, North Korea, which imports crude and refined oil from China, Russia and other countries, will face a growing import burden. In accordance with the February 13th agreement reached through six-party talks, South Korea, the United States and others will provide some heavy fuel oil, and the agreement stipulated the amount of oil to be delivered, rather than the value, so this will not be affected by rising prices. However, this oil does not cover all of the North’s needs, and as for the remaining portion, either the amount imported will have to be reduced, or the North will have no choice but to invest considerably more in fuel. In addition, as a large portion of North Korea’s oil is imported from China, Pyongyang’s trade deficit with its neighbor will also grow.

According to the Korea Trade Investment Promotion Agency (KOTRA), North Korea imported 523,000 tons of crude oil from China in 2005, 524,000 tons in 2006, and 523,000 tons last year, each year accounting for approximately 25 percent of total oil imports. North Korea’s trade deficit with China has shown a steadily growing trend, reaching 212,330,000 USD in 2004, 588,210,000 USD in 2005, and 764,170,000 USD in 2006. With grain prices also skyrocketing, and North Korea depending largely on China and Thailand for rice and other grain imports, the burden on the North’s economy is growing, and this is one factor in the instability of domestic prices in the DPRK.

According to the Chinese Customs Bureau, North Korea imported 81,041 tons of rice and 53,888 tons of corn last year, increases of 109.9 percent and 37.4 percent, respectively. North Korea’s corn, rice and oil imports from China are subject to market price controls, so that rising international prices directly affect the North’s cost burden. Last year, the price of Chinese goods rose 4.8 percent, recording the largest jump in ten years, and this trend extends to a wide variety of goods. 80 percent of disposable goods in North Korea are produced in China, and rising Chinese prices are directly reflected in North Korean import costs, which is passed on to DPRK citizens.

As North Korea emphasizes the building of its economy, it appears unlikely that residents will feel any direct effects of Pyongyang’s promise to prioritize the stability of its citizens’ livelihoods.

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DPRK economic statistics from KEI (BoK data)

Saturday, February 2nd, 2008

In October, the Korea Economic Institute published a presentation of North Korean economic data assembled by the Bank of Korea.  Basic stats below:

  • GDP: -1.1% in 2006 (+3.8% in 2005)-Due to decrease in agriculture output. 
  • Services are the largest component of the economy (34%)
  • Trade volume (exports + imports) approximately US$3 billion
  • 2005 trading partners in order: China, South Korea, Thailand, Russia, Japan, Singapore

See the full report here: northkorea.ppt

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Tangerine-carrying ship to leave for N.Korea

Saturday, December 8th, 2007

Yonhap
12/8/2007

A ship carrying 1,400 tons of tangerines will leave Sunday for North Korea from a port on this southern island of South Korea to help promote peace and reconciliation between the two Korean states, island officials said Saturday.

They said that the tangerines grown by local farmers have been loaded onto a 3,500-ton ship, which will set sail for the North on Sunday afternoon. With crews including three South Koreans, the Panama-registered ship will arrive at Nampo, a western port town of North Korea, Tuesday, they said.

This is the first batch of 10,000 tons of tangerines that will be sent to the North this year. The officials said that the remainder will be delivered by the end of January next year at the latest.

They said that Jeju Island has sent 36,488 tons of tangerines and 17,100 tons of carrots to the North since 1998. It was humanitarian aid designed to promote peace and co-existence between the two Koreas, which remain technically at war after the 1950-53 Korean War ended in a truce instead of a peace treaty.

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S. Korea provides 4 tln won worth of rice, fertilizer to N. Korea

Friday, October 19th, 2007

Yonhap
10/19/2007

South Korea has spent nearly 4 trillion won (US$4.36 billion) over the last six years to provide rice and fertilizer to North Korea, the Ministry of Agriculture and Forestry said Friday.

In a report forwarded to lawmakers for this year’s parliamentary audit, the ministry said Seoul spent 3.33 trillion won to send 2.2 million tons of rice to Pyongyang from 2002 to August of this year.

It said 400,000 tons of rice were shipped every year from 2002 to 2004, while 500,000 tons were shipped in 2005. Numbers dropped to 100,000 tons last year after Pyongyang fired off rockets and exploded a nuclear device.

This year, 400,000 tons have been sent to make up for poor harvest in the North.

Of the total, 2.1 million tons of rice were sent as low interest, long-term loans to be paid back in 20 years after a grace period of 10 years.

The ministry said 620 billion won were spent to send about 2 million tons of fertilizer to the North in the cited period.

Opposition lawmakers claimed the government had diverted 2.18 trillion won from the country’s grain management special account to provide North Korea with agricultural support.

“The grain account is aimed at helping local farmers. but the government is using it to supplement the inter-Korean cooperation fund,” said Rep. Hong Moon-pyo of the conservative Grand National Party.

He said that because it will take some time to recover the money, any shortcomings in the grain fund will have to come from the regular account and that will create a burden for taxpayers.

The government asked lawmakers to approve 909.6 billion won for next year’s inter-Korean cooperation fund. This year, the fund amounts to 870.4 billion won.

The money will be used to send 500,000 tons of rice and 400,000 tons of fertilizer to North Korea.

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Food Crisis Tough But Better Than Before

Tuesday, August 21st, 2007

Daily NK
Kwon Jeong Hyun
8/21/2007

Escalating Rice Costs 1,900!!

As the month of August began, North Korea saw a sudden jump in its rice costs. While 1kg of rice reached a peak of 1,960won (around US$6.03) in Shinuiju, entering the second week of August, prices seemed to have stabilized around the 1,500won marker.

Due to the damages incurred from the recent flooding in North Korea, the cost of rice was something expected. In the second week of August, the DailyNK reported on the flood situation and the consequent price fluctuations. The following report will indicate the damages from the flood and food situation as well as the course of rice costs.

We discovered from a telephone conversation with Ahn Geum Soon (pseudyonm, 37) on the 10th, a trader who sells clothes in Shinuiju, North Pyongan that the cost of rice had suddenly escalated to 1,900won per kilo dropping back to 1,500won within a 10 day period.

Ahn said, “Even people who trade secretly in private or at Jangmadang (markets) are finding it hard to obtain rice as there simply isn’t enough going around” and informed, “There are some people who are already stocking up on rice as rumors suggest that the costs will go up a little more. These people are the ones to raise the prices.”

Regarding the cause in escalating rice costs, Ahn said, “I’m not sure. According to rumors, people with money are the ones hoarding the rice, but no one is really sure of the reason.”

“Some people are going through tough times with the sudden rise in rice costs but no one is dying of starvation. People who can’t afford rice eat corn. Even if the cost of corn rises, its only 500won” said Ahn and added, “Nonetheless, there are the occasional beggars living in the country and the city who die of hunger, but this is no different to the past.”

Kim Il Yong (pseudonym, 36) who lives in Taecheon, North Pyongan informed a reporter on the 11th, “Currently, the cost of rice is about 1,500won per kilo. There was a great difference in prices within a period of 10 days.”

Kim responded, “Some say that the costs are rising as South Korea and other foreign countries are not supporting us with rice, while others say that that prices are rising as there is not enough rice going around. I’m not sure what is going on.”

He continued, “There are rumors that rice prices will reach 2,000won. Nevertheless, there won’t be any cases where people die of hunger. Like we will reach that stage when potatoes have been picked and are being sold at Jangmadang and the corn harvest has begun.”

Kim who has relatives living in the Hamheung said in response to the claim by a South Korean support organization that 300 people have died of starvation, “Hamheung is comparatively a large city. Rumors would quickly spread if people were dying of starvation. 300 people can’t be dying of starvation.” He said, “My sister in-laws younger brother went to Hamheung 3 days ago. He said he hadn’t heard of any rumors of people dying of hunger.”

Another source in North Korea said in a conversation with a reporter on the 11th, “Up to a month ago, rice cost 850won per kilo” and commented, “There are a lot of coal mines at Dukcheon. It is known as a region where you can make money. Rations are distributed by the employer to the people who work at the mines and so it’s not so hard for them.”

Then he added, “It was a little tough in June as the employers stopped distributing rations for a while.”

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N. Korea’s food situation not as bad as expected: agricultural scholar

Tuesday, June 5th, 2007

Yonhap
7/6/2005

North Korea’s food situation is stabilizing and is not as bad as expected in rural areas, a South Korean agricultural scholar who just returned from Pyongyang said Tuesday.

In an interview with Yonhap News Agency, Kwon Tae-jin, senior scholar of the state-run Korea Rural Economic Institute, said, “The peak of food shortage usually comes in June, but I didn’t feel it probably because North Korea released food rations.”

Kwon visited Pyongyang, Chongju in North Pyongan Province, Hamhung in South Hamgyong Province and Paechon in South Hwanghae Province, along with officials of World Vision, an international relief agency, May 25-31.

In March, North Korean officials indicated that North Korea faced a shortfall of 1 million metric tons of food and asked the World Food Program (WFP) to expand its assistance.

Jean-Pierre DeMargerie, head of the WFP’s office in North Korea, said that the situation is not as bad as it was in the 1990s when about one million North Koreans are estimated to have died of hunger, but the food situation has again “started to deteriorate because of June and August flooding of critical cropland and major reductions in WFP and bilateral food assistance.”

Kwon said North Korea would have little difficulty planting rice seedlings this year as reservoirs are full of water in most plains, and tractors and rice-planting machines can work at full capacity.

“In some areas the food situation might be worsening, but agricultural production has stabilized. They seem to be focusing on diversifying their sources of income by planting some cash crops,” he said.

A weak harvest in 2006, disastrous summer flooding and a 75 percent fall in donor assistance dealt severe blows to the impoverished nation, according to WFP officials.

South Korea resumed shipments of fertilizer and emergency aid to the North, but it plans to withhold rice aid as an inducement for North Korea to fulfill its promise to shut down its main nuclear reactor as part of the landmark February 13 agreement.

South Korea suspended its food and fertilizer aid to North Korea after the North conducted missile tests in July. Resumption of the aid was blocked due to the North’s nuclear bomb test in October.

According to a recent think tank report, North Korea could run short of up to one third of the food it needs this year if South Korea and other countries withhold aid.

Data from the WFP and South Korea’s Unification Ministry show that the North will need between 5.24 million tons and 6.47 million tons of food this year. Depending on the weather, the availability of fertilizer and other factors, the communist state may only be able to produce 4.3 million tons of food by itself, the report said.

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China’s grain exports to N. Korea remain flat in Jan.-April

Friday, June 1st, 2007

Kyodo (Hat Tip DPRK Studies)
6/1/2007

China, North Korea’s major food supplier, exported roughly the same amount of grain to the country in the first four months of the year as it did a year earlier, according to recently released Chinese customs figures.

China’s January-April exports of maize, rice and wheat flour to the country totaled 55,446 tons, up 0.6 percent from the same period in 2006, according to the figures.

When compared to 2005, exports were down 66.7 percent.

The World Food Program warned earlier this year that the food shortage in North Korea is worsening.

While North Korea has faced a chronic food shortage, the shortfall had been made up in the past by multilateral aid channeled through the WFP as well as bilateral shipments from countries such as China and South Korea.

But external food aid has gone down recently, leaving the North with a huge food deficit.

China does not explicitly reveal its food assistance to North Korea, and analysts rely on export figures to assess the amount of aid Beijing gives Pyongyang.

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19 Dollars a Month Means Three Corn Meals a Day

Monday, April 2nd, 2007

Daily NK
Han Young Jin
4/2/2007

“100,000 won (approx. US$32.2) doesn’t cut it.” This is a sigh-ridden comment of a North Korean citizen, who states that even if he has 100,000 won, it is not much to spend.

The recent currency depreciation of the North Korean won has been exacerbating the North Korean citizens’ burdens of their costs of living.

Such a situation has been ongoing since the July 1st Economic Measure in 2002, but with the concentration of money in the privileged class, the grim realities of life of vulnerable persons have been becoming more difficult.

Hoiryeong citizen Park Hyun Sik (pseudonym), in a phone conversation with Daily NK on the 30th, stated that “a decent Chinese jumper costs 30,000 ~50,000 (approx. US$ 9.7~16) won for one, 3,000 won for 1kg of meat, and 2,700 won per a bottle of oil. After eagerly awaiting a month, I go to the market with 100,000 won (approx. US$ 32.2), but end up with nothing even though I did not buy much.”

Mr. Park, who conducts the wholesale business of relaying goods received from overseas Chinese emigrants to the provinces, receives a monthly income of 300,000 won. This puts him in a good class in North Korea. Mr. Park’s family, which consists of his wife and son, plans to secure food with this money.

Evidently, a family of four needs 50kg (50,000 won) of rice, which costs 1,000 won per kg, and 20 kg (7,000 won) of corn, which costs 350 won per kg, to survive. Additionally, the cost of buying a bottle of bean oil at 2,700 won as well as pepper powder, vinegar, garlic, onions and other vegetables is almost equal in value to the cost of buying rice.

On top of this, the family says they eat pork meat about once a month, which costs 3,000 won per kg. The rest of the money goes to the three family members’ clothing and cigarettes and drinks for Mr. Park, all of which cost about 300,000 won. Even then, Mr. Park tends to be on the well-fed side.

Working Citizens Cannot Eat Meat Even Once A Month

Kim Jung Ok (Alias), who sustains her living through a noodle business in the Hyeryung South Gate jang (market), has a monthly living expense of approximately 60,000 won. Ms. Kim is a housewife, who has taken on the responsibility of her three-member family.

Even if she sells noodles all day, she only makes 2,000~3,000 won. She merely earns around 60,000 won per month, all of which goes to food. Making a profit from her business is a mere dream, she expresses. She cannot even think about rice; after buying 70 kg of corn (23,000 won), bean oil, beans (950 won per kg) and other vegetables, she has nothing left.

The monthly income of her husband, who works at a machine shop in Hoiryeong, is 4,000 won. That is enough to buy 4kg of rice. Fearing starvation if she solely depended on her husband, she opened her noodle shop 10 years ago. “Even if we are both working like this, it is barely enough for corn meals. It is difficult to buy a kg of meat in a month. It has been a long time since I fed meat to my child,” she confessed.

Currently, with the exception of storekeepers who trade with Chinese emigrants, foreign currency traders, and those who have relatives in China, a majority of residents in Hoiryeong live daily as Mr. Park.

Recently, the Ministry of People’s Safety Agency issued the order that “Rations will be distributed in April. So, stop engaging in illegal trade.” Due to this decree, the control of the jangmadang (market) has been tightened. Discontent among residents who sell Chinese industrial products has climaxed, “How can we live if they feign ignorance while not providing the rations?”

The regulation of jangmadang (market) by ministry officials has only raised the price of Chinese industrial products. Before that, there would be joint bargains, but now, purchasers are visiting the merchants and so the costs of products are going up.

On one hand, the influence of the dollar’s recent bearish turn in the international market is fully reflected in the North Korean black market. The exchange rate of 800 won to a dollar between the Chinese Yuan and the dollar remains unchanging, but the North Korean currency following suit to the dollar and the Yuan changes day to day. Ultimately, North Korea is not “a region with a fixed exchange rate” due to the fact that exchange merchants occasionally apply the exchange information received from China.

Due to the dollar’s slump, the ratio of the North Korean won to the dollar and to the Yuan has been on the decline for several months. Mr. Park said, “In January, the North Korean currency went up to 42,000 won per 100 won RMB, but has drastically gone down to 36,500 won per 100 won.”

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Author sees North Korea as reluctant to reform

Monday, March 26th, 2007

Reuters
Paul Eckert
3/23/2007

The diplomatic deal that promises to bring North Korea aid in exchange for scrapping its nuclear weapon programs might allow the government to resist meaningful economic changes, an expert on the secretive communist country’s economy said on Friday.

Marcus Noland of the Peterson Institute, a Washington economic think tank, said research for his new book on North Korea’s deadly 1990s famine showed Pyongyang was “at best, ambivalent” about changing policies that led to that disaster.

“The great hope is that reassurances in terms of external security will give the North Korean regime the political room to engage in greater political and economic liberalization at home,” the economist told Reuters in an interview.

But the diplomacy playing out in Beijing could have the opposite effect, said Noland, co-author of “Famine in North Korea: Markets, Aid and Reform” with Stephen Haggard of the University of California, San Diego.

“It could well be that a nuclear deal that resulted in greater amounts of aid would actually allow the North Korean government to intensify activities that are essentially reestablishing economic and political control over the population,” he said.

Negotiators from North and South Korea, China, the United States, Japan and Russia were in Beijing this week, seeking to begin implementing a Feb. 13 deal that would give the North aid and security assurances in return for shutting down a nuclear reactor and preparing other disarmament steps.

Noland’s 368-page study of the famine that killed an estimated 1 million North Koreans in the late 1990s shows how the rigid central planners of Pyongyang were forced to allow markets to feed people and to give farmers some limited freedoms, but then pulled back when the disaster eased.

“When things look better … the North Korean government tries to pull back on this process of marketization and reform,” Noland said.

“One of the saddest things is that as food aid began arriving in North Korea, the regime systematically cut the amount of food it bought on commercial terms,” he said.

The author of three books on North Korea decries what he says are “truly reckless” food policies since the end of the famine. Pyongyang has banned trading in grain on markets that people rely upon for food, confiscated grain in rural areas and reneged on policy promises to farmers, he said.

“In a variety of ways, it seems to want to put the genie back in the bottle,” he said.

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Deliver Humanitarian Aid Directly to the Starving Affected Areas

Tuesday, February 20th, 2007

Daily NK
Kang Jae Hyok
2/20/2006

Every year when spring arrives, North Korea faces yet another food crisis. 10 years after the “march of suffering,” North Korea has still made little change.

The greatest change that has occurred is by the North Korean people. The most of North Koreans have surpassed the ‘march of suffering’ and have survived by relying on themselves

In comparison to last year, the Korea Rural Development Administration (RDA) estimated that North Korea had experienced a loss of 1.8% (60 thousands tons) in agricultural production at 4.48 million tons of cereal. The World Food Program (WFP) also predicted similar figures at 4.3 million tons.

On the other hand, a national North Korea aid organization Good Friends reported that only 2.8 million tons of agricultural production had been made and that if any less than 1.5 million tons of food aid was supported, North Korea would be faced with another severe food crisis.

In the 90’s foreign aid could block mass starvation

During the “march of suffering” that began in the mid-90’s, food distributions were suddenly terminated. Nonetheless, people went on working, starving, believing that food distributions would begin once again.

However, one month passed then two, and still the distributions did not resume. In the end, the number of deaths from starvation began to arise. Yet, North Korean authorities did not respond with any countermeasures. As a result, in 3~4 years, 3mn North Korean citizens died of starvation.

Nonetheless, the tragic mass starvation that occurred at the time could have been stooped if it weren’t for the irresponsible acts of North Korean authorities. We can view this by analyzing the figures denoting the amount of aid supplied from 1995~1999.

Year   1995   1996   1997   1998   1999
Production of food
         3490   2500   2680   2830   4280
Aid from FAO
           980   1070   1440   1490   1190
Aid from S.Korea
           960   1050   1630   1030   1070
Food distributions in North Korea
         4450   3550   4120   3860   4450
       ~4470 ~3570 ~4310 ~4320 ~5476
Death rate 
               615    1704     549 
         (Unit: 1,000 tons, million persons)
 
Table of North Korea’s food production and foreign aid in the 90’s in comparison to the death rate. (Good Friends 06.12.22)

According to the table above, South Korea and the Food and Agriculture Organization of the United Nations (FAO) aided North Korea with 2mn tons of food annually from 1995~1999.

If we consider that only 10,000 tons of food is needed to provide the whole of North Korea a day, then there would be no reason for a shortage in food distributions with a total of 3.7mn tons of food aid being supplied. According to the table above, annual aid provided to North Korea was 3.55mn tons at the minimum and 4.45mn tons maximum. This equates on average at 4.09mn tons of supplies.

However, during this period 3mn people died of starvation and 30mn people defected from North Korea. Contrary, there has never been a time where so much foreign aid was supplied to North Korea. Why then at a time where greatest aid was given to North Korea, was there the greatest number of deaths?

One of the essential reasons behind this occurrence was the fact that foreign aid never reached the provinces of North Hamkyung, Yangkang and Jakang where food was most needed. If food aid had been distributed to the areas most dire of starvation, then at the least, this incident would not have occurred.

At the time, most of the aid was distributed preferentially to soldiers, authorities and powerful ministers in Pyongyang. On the whole, aid to North Korea had been sent via ship through Nampo, Haeju and Wonsan harbor, then supplied to Pyongyang and South Pyongan province.

During the 90’s, transportation of cargo was practically immobilized due to the shortage of electricity and lack of fuel which ultimately led to the suspension of locomotives. On the whole, goods are transported via railroad, however, in the 90’s, both passenger and freight trains had come to a halt.

Basically, it takes about a fortnight to travel return, from Wonsan, Gangwon province to Najin, North Hamkyung on train 21. The Pyongyang-Tumen River train which departs from Pyongyang to Sunbong, North Hamkyung on train 1, also takes more than 10 days travel return.

Back then, it took twice as long to for a freight train to reach its destination in comparison to a passenger train. 10,000 tons of foreign aid that arrived at Wonsan harbor took 2~3 months to transport from North Hamkyung to Chongjin. In other words, it would take more than 2 years to distribute 100,000 tons of food to Wonsan in Gangwon province to Chongjin in North Hamkyung province. Hence, it is pointless to rely on railroad to distribute goods.

Losses incurred while transporting aid

Further, 30~40% of goods go missing while being transported. Every time a cargo train stops, guards responsible for the goods sell rice to traders at wholesale prices so they can use the profits to live. Also, street kids and thieves often steal the goods so that the intial 1,000 ton of rice is often depleted to 600~700 tons upon arriving at its destination.

The problem is that North Korean authorities well aware of this fact that are unwilling to modify the routes or assert change. Ultimately, foreign aid is distributed throughout the regions of Pyongan province where the situation of food is relatively good in comparison to the rest of North Korea.

As rice only lands in the hands of people living in Pyongyang and Pyonan where influential ministers and Kim Jong Il’s elite reside, it can only be analyzed that this situation is occurring under specific motives. In the end, the majority of deaths occurred in Hamkyung, Yangkang and Jakang, and the situation has remained the same until today.

Following the missile launch and nuclear experiment, last year South Korea and the international community suspended food aid to North Korea, and in Feb 13th, the third phase of 5th round 6 Party talks ended with the South Korean government confirming that food aid would resume.

Undoubtedly international food aid is important but unless rice is distributed to the areas in most need, a similar situation to the 90’s will occur once again.

More importantly and urgently, aid must be delivered directly to the provinces of Yangkang, Hamkyung and Jangang. Thinking that North Korean authorities will wisely distribute food aid throughout the country is merely a South Korean fallacy.

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