▲ North Korea's 'ice' or 'bingdu' in Chinese ⓒ the Daily NK

Changchun, China -- The North Korean authorities have recently toughened up checks of the narcotics trade, and as a result the prices of drugs such as methamphetamines (known in North Korea as “ice”) are said to have risen significantly.

According to sources, increasing narcotics prices are also a key factor in both increasing commodity prices and house price inflation.

An inside North Korean source who spoke with The Daily NK on the 7th explained, "The price of narcotics has jumped significantly. As a result, jangmadang prices are rising as a whole."

Another inside source explained why, "Nowadays, it is extremely difficult to obtain ice. The police have been vigilantly watching those suspected of drug dealing, so the slightest wrong move has led to detentions."

Until the fall of 2007, a kilogram of ice inside North Korea cost around 5 million won and the drug could be easily obtained anywhere.

However, concentrated inspections in key drug production areas in Hamheung, North Hamkyung Province and Pyongsung, South Pyongan Province, began in February of last year, and production has slowed down considerably as a result, which is adding to inflationary pressure.

The source said, "In February of last year, approximately 30 people who were making and selling ice at the Defense Security Command in Hamheung were captured. Among them, six were publicly executed and the family members of eight were taken to political prison camps."

He went on, "With narcotics production decreasing significantly due to targeted inspections in Hamheung and Pyongsung, a kilogram of ice rose first to 10 million won (approximately $2,700) in February of last year and then to 20 million won in April of the same year."

By October 2009, the price of a kilogram of the drug cost between 50~70 million North Korean won (according to quality) and, if smuggled to China, it generated a profit of 150,000~200,000 Yuan (80~100 million North Korean won). This is equivalent to $25,000~35,000.

The source also said that the increase in narcotic prices within North Korea has been influencing prices in some other sectors as well.

"In Chosun (North Korea), what really regulates house prices is narcotics. The costliest house in the center of an average city is worth roughly the same amount as a kilogram of ice."

The source explained, "Until last year, the price of 20- and 21-dongs apartment complexes (a top luxury apartment located in Hyesan-dong, Hyesan) cost approximately 20 million won, but this year, it is 40 million won. It is soon expected to climb to 50 million won."

The hike in housing prices is linked also to the rise in jangmadang prices. The price of rice in North Korea is usually 2,200 won per kilogram. After the harvest, the price tends to drop significantly, but this year there was not much of a drop. The reason stems from not only the scarcity of food, but also the increase in drug prices.

Such a wide range of influences being attributable to drug prices is down to the fact that a significant portion of incoming Chinese Yuan (RMB) and U.S. dollars depend on drug smuggling, and the fact that the transaction fees between narcotics handlers and jangmadang money men have gone up dramatically as well.

The source finally relayed that, ironically, the sudden rise in the price of ice has finally led established ice manufacturers to gradually reduce production as opportunists have started entering the market.

The source said, "With ice prices jumping several-fold, many people have come forward, claiming plans to start production in spite of inspections.”

“With many ice addicts gravitating towards opium, the price of the latter has also risen simultaneously," he said.

Opium has reportedly risen from 5,000 to 7,000 won per gram this year alone.