Rice Prices Mixed as Harvest Nears

Lee Sang Yong  |  2013-09-17 15:34
As the autumn harvest approaches, prices remain stable in most regions of North Korea. The middle ten days of September saw a decrease in the price of rice in both Pyongyang and Sinuiju, with rice now being traded at 4800 won and 5100 won respectively.

In contrast, the price of rice in Hyesan has risen to 6000 won. Sources claim this price differential is a result of the distribution of wartime rice stores in Pyongyang, released to celebrate the anniversary of the founding of the DPRK on September 9th.

Prices generally tend to rise during the autumn harvest period due to increasing demand for food and a simultaneous decrease in public distribution.

Sources report that only a small amount of rice was distributed in Sinuiju, but prices have nevertheless remained stable because of the significant volume of rice traded with China.

The same cannot be said for Hyesan, where authorities have recently been intensified efforts to stem the flow of illegal border crossings and defections. This has had an inflationary impact on rice prices, as less grain is brought into the area.

A source in Sinuiju told Daily NK, “Compared with the seriousness of last year’s shocks, rice prices this year have remained stable at around 5000 won. Of course, last March rice cost around 7000 won, but public distribution combined with a reliable supply coming in from outside the country has contributed to stability.”

“But Hyesan continues to suffer as the authorities are clamping down on border control and customs screenings. The rice trade has dwindled as a result."

A source in Pyongyang added, “This year the authorities released the wartime rice reserves so prices didn’t rise in any big way. It actually dropped following the public distribution of rice for the Republic Foundation Day. But it may rise again as some of that distributed rice can now be found in wholesale and retail stores in other regions.”

Sources have confirmed that potato and corn crops escaped typhoon and flood damage this year, indicating that grain prices will remain stable for the foreseeable future.

With the exception of Hyesan, exchange rates have also seen a small downward trend. The dollar exchange rate in Pyongyang and Sinuiju fell by 170 won and 90 won to 8020 won and 8090 won respectively. In contrast, the dollar exchange rate in Hyesan rose 30 won to 8140 won.

Senior researcher at the Korea Rural Economic Institute Kwon Tae Jin believes that, “The corn harvest in North Korea was successful this year, and there is talk that the rice harvest will also go well. The market peddlers would have heard this and decided not to hoard grain. Prices have dropped as a result.”

He adds, “The prohibitive cost of logistics in North Korea has resulted in regional price gaps. If this continues the market peddlers may move around, effectively closing this gap.”
 
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2014.04.21
Won Pyongyang Sinuiju Hyesan
Exchange Rate 7,650 7,700 8,000
Rice Price 3,800 3,900 4,000