Market prices and exchange rates are once again fluctuating significantly as the first anniversary of Kim Jong Il’s death (December 17th) approaches. Things had stabilized in recent weeks, but concern over what the mourning period could mean for markets appears to have created fresh uncertainty.
A Yangkang Province source told Daily NK on the 6th, “Rice was 6,000 won the day before the mourning period was declared, but that went straight to 6,500 won the morning of the declaration. It is the result of last year’s experience, when they clamped down on both markets and the movement of people and goods.”
After Kim Jong Il’s death was announced by state media on the morning of December 19th, 2011, the authorities marked a 100-day period of mourning during which the issuance of travel documents was halted for multiple sectors and regional movements were heavily restricted. More problematically, all markets were closed for the ten days between the announcement of Kim’s death and the funeral. People living day-to-day suffered the double hit of higher prices at black markets based in private homes and the inability to trade in the market themselves.
As a result, people have now started buying large amounts of goods in advance. This is driving up prices, while some traders are hiking them further in preparation for possible supply shortages. These concerns are well-founded, since customs houses on the Sino-North Korean border have stopped inspecting freight, effectively prohibiting imports.
Kim, an ethnic Korean in China who trades with North Korea from Changbai, the Chinese city lying across from Hyesan, said, “Even in cases where we have been granted quotas, the goods are unable to enter North Korea.”
As a result, the Yuan exchange rate has also risen sharply, from roughly 1000 won per Yuan on the 4th to 1400 won on the 6th.
