This is “NK Market Trends,” bringing you
weekly updates on the North Korean economy. This week we sat down with reporter
Kang Mi Jin to discuss the latest trends; but first, let’s take a look at how
the jangmadang (market) has been doing. We’ll begin by providing a rundown of
the price of rice, the currency conversion rates, and the cost of other goods
in North Korean markets.
The price of 1 kg of rice was 5,400 KPW in
Pyongyang, 5,300 KPW in Sinuiju, and 5,100 KPW in Hyesan. The USD was trading
at 8,600 KPW in Pyongyang, 8,900 KPW in Sinuiju, and 9,000 KPW in Hyesan.
Moving along, the cost of one kg of corn kernels was 2,000 KPW in Pyongyang,
1,900 KPW in Sinuiju, and 2,000 KPW in Hyesan. One kg of pork was selling at
14,000 KPW in Pyongyang and Hyesan, and 14,500 KPW in Sinuiju. Gasoline was
trading at 7,000 KPW per kg in Pyongyang and Sinuiju, and at 6,000 KPW per kg
in Hyesan. Finally, 1 kg of diesel fuel was selling at 4,500 KPW in Pyongyang,
4,000 KPW in Sinuiju, and 4,100 KPW in Hyesan. This has been a rundown of the
latest market prices in North Korea.
1. It is already the end of autumn. It must
be quite a bit chillier in the North compared to down here, no?
Yes, that’s certainly true. At this time,
residents are making the final push to finalize all their various winter
preparations.
2. Does that mean that winter related goods
are selling well in the markets?
Yes, according to our inside sources,
merchants are pretty satisfied because they are selling winter goods at a fast
rate. Around this time of year, I’m always sure to buy and wear thermal
underwear to protect against the winter cold. Compared to South Korea, the
North has less access to modern methods to help cope with the extreme weather.
So residents have a lot of preparations to do in order to make sure that they
are ready. This includes buying products like thermal underwear, winter boots,
and padded coats. The informant has also told us that residents who live
in regions abutting Baekdu Mountain in Yanggang Province have to be extra
careful and industrious in order to prepare for the particularly cold weather
coming their way.
3. So, if that’s the case, there must be a
lot of demand for winter products. Can you explain a bit about the prices and
types of goods available?
We have seen higher sales figures for
thermal underwear than we have for winter boots or winter jackets. There are a
few reasons to account for that. First of all these goods tend to be a bit more
expensive. Secondly, once residents purchase boots or a winter coat, they
expect to be able to wear it for many seasons. Therefore, there isn’t as much
annual demand for these long lasting goods.
On the other hand, thermal underwear is
relatively cheaper than boots and coats. Plus, most thermal underwear is a
lower quality product made in China and it tends to fray after just one season.
Even if the underwear doesn’t tear, they’re sold at such a reasonable rate that
it doesn’t hurt to stock up.
Outside of thermal underwear, padded coats
for children are also selling well. In addition, unisex gloves are also making
their mark. One pair of gloves can fetch approximately 20,000 KPW (about US
$2.42). Thick winter socks are also selling well; some even have a feature that
warms your feet. Because North Koreans lead such active lives – being forced to
do hard labor during mobilizations for example – they normally have to purchase
new socks each year.
4. In South Korea, jackets padded with
cotton and duck feathers are the trend du jour. When you look out on the winter
streets, you see people crossing this way and that wearing various styles and
vibrant colors of these coats. What’s it like in North Korea?
I’m not sure what is like for the other
regions, but in Yanggang Province and North Hamgyong Province, people refer to
padded winter coats as “Dong-bok.” As for me, I have a large, padded coat
taking up a whole half of a drawer in my wardrobe. I think I’ll have to break
it out soon enough. In South Korea, all people, regardless of gender or age,
freely wear coats of all different colors, right? I myself have a black coat, a
red coat, and a purple coat with a pearly sheen.
If an adult in North Korea were to wear a
coat with these sorts of flamboyant colors, they would certainly stick out and
be stared at. Most residents stick to black or to a color reminiscent of
military uniforms. When people gather for an event during the winter, the
entire area gets flooded with the dark colors of these coats.
4-1. I’m also curious about the winter
boots mentioned earlier.
Winter boots are called “cotton wool shoes”
because they are made by inserting extra cotton as padding into the shoes. It’s
a kind of shoe that you would never see in South Korea. At some point, they
emerged on the scene through a piece of propaganda advertising in the Party publication Rodong
Sinmun. They are being produced at a shoe
factory in Yanggang Province’s Hyesan City.
The propaganda also made reference to the
fact that Kim Jong Un really loves these shoes. The shoe factory in Hyesan
makes a wide variety of shoes including boots for soldiers, boots for everyday
wear, and boots for forest workers. According to the propaganda, the boots
tailored for forest workers are said to be made according to specifications
from Kim Jong Un himself.
5. Fashionable ladies going to winter
picnics are wearing trendy scarfs these days. When I see pictures of North
Korean ladies in the winter, they have the scarves wrapped around their heads
rather than around their necks. Is there a reason for this?
Yes, there is in fact. Scarves go by
different names in different regions, but most people will recognize it by the
name “head towel.” In some regions, scarves go by the Japanese monicker
“mahura.” That’s the extent of my knowledge on the matter, but I’m sure there
are other names as well.
Of course, we could simply say that the
reason for North Koreans wrapping their scarves around their heads comes from
the fact that it is simply colder in the North, but I think the fact that most
residents are engaged in some sort of work or activity outside is also an
important factor. I’m not sure whether you got a chance to see clearly in
videos we’ve obtained from North Korea, but I think you would have picked out
which types of residents were wearing the “head towels.”
5-1. If I’m not mistaken, I believe they
were mainly women…?
Yes, you saw correctly. Men will sometimes
wear scarves when they work outside or ride in trucks, but women are much more
likely to be spotted with the garment. Instead, men usually wear a winter hat
called a “dongmo.” Furthermore, a lot of winter coats come with hoods attached,
so they usually suffice in normal winter conditions. These hoods are great for
keeping the frigid wind out of the faces of market sellers and outside workers.
Most of the padded jumpers for sale in the market come with a hood attached.
6. So, how much are all of these popular
goods selling for?
In Yanggang Province’s Hyesan market, a
child size padded coat sells for between 145-170 yuan (about 200,000 KPW or US
$24.21). An adult side padded coat sells for between 200-300 yuan. A coat
stuffed with goose down can fetch as much as 500 yuan. Winter boots are selling
for about 40,000 KPW (US $4.82) a pair. Our sources also indicate that
children’s winter boots are also on the expensive side. Children’s winter
gloves are selling for between 10,000-15,000 KPW (US $1.21- $1.81) a
pair, while the adult variety goes from about 15,000 KPW – 20,000 KPW (US $1.81
– $2.42).
7. There’s clearly a wide variety of goods
available. I’m curious how it gets made and shipped into North Korea.
First, to give a preliminary explanation of
the logistical setup, it’s important to know that transportation networks begin
in the interior, border regions and then spread out through the rest of the
country. The “runners” or wholesalers play a big part in this process. In some
instances, the goods come in from China and they are already totally made and
assembled. In other cases, fabric and other materials come in and then get
assembled inside North Korea.
8. So that means that there are textile
factories in the North that actually assemble the padded coats, correct?
Yes, the merchants get the materials and
fabrics from China through smugglers or trade and then bring them into the
North to be put together. This means everything including the thread is
imported from China. The coat makers do some market research to see what sort
of styles and colors are selling well before deciding on their own product
design, but the process is normally not a one man operation.
Normally, each person has an individual
task that they specialize in. These people are linked up in a conveyor belt
line and the product goes from one person to the next until the coats are fully
assembled. One person affixes the pressed cotton to the fabric, one person
assembles the zipper, and so on. In some cases, one person does the whole
process from start to finish.
9. Wow, so these small factories are
taking up the practice of specialization. It seems like this might be a crowded
marketplace; are we seeing any signs that there are too many suppliers getting
into the winter clothes business?
This isn’t a fixed system. Merchants aren’t
required to come together from start to finish to complete the tasks together.
That’s why you’ve seen the rise of specialization, where each person
contributes partial progress towards the final product. Some padded coat
producers gather together to pool resources and make their goods. This isn’t an
entirely good thing, however.
I had a friend participate in one of these
cooperative coat making schemes. They distributed the profits amongst
themselves evenly, but there were some differences of opinion on the direction
of the enterprise. There was a disagreement for example, over whether to divide
the profits evenly or to adjust the pay according to the intensity of the
labor. These kinds of collisions naturally arise in any cooperative system.
That’s why there are some people who are willing to take a hit in profits to
save themselves the headache of compromising with a team of diverse
individuals. An inside source has informed us that even small disagreements
have turned into major fights over the control and direction of the
cooperative.
10. Do we see any difference in profit
margin between the coats produced by teams versus those produced by people
working alone?
The difference in margin is not so large.
No matter how the padded coats are made, when they hit the market, the prices
are all pretty similar. This means that there also isn’t that big of a
difference in profits either. However, there is a bit of a difference in the
price of the imported Chinese materials depending upon the size of the order.
The materials cost therefore also plays a role in determining the profit
margin.
11. When I look at the process of buying
materials, assembling them, and selling them at the market, it looks a whole
lot like capitalism to me. Is the process of transportation, production, and
price-setting similar to other goods as well?
Yes, absolutely. Other materials come into
North Korea and are put together in ways that are very similar to the process I
just described about the padded jackets. However, we do see some differences
depending upon the type and quality of the product. Especially when it comes to
textiles, there are virtually no North Korean fabric producers, so that means
that the price and the market in general are sensitive to changes in foreign
supply. I hope that all the North Korean residents who are struggling to get
all their winter preparations done in time will get a nice, thick padded coat
and stay warm until the spring. Thanks for listening.
