North Korean Imports Bring Rice Shortages to China

Lee Sung Jin  |  2009-12-28 18:56
Changchun, China -- According to sources in China, areas surrounding the North Korean border are suffering significant rice shortages and attendant inflation due to a sudden decision by the North Korean authorities to allow rice imports, despite this being the annual period when North Korean customs houses close for a winter break.

As a result of the decision, North Korean merchants charged with providing rice to procurement stores set about bringing in more from China. In addition, National Security Agency officials and border patrol units started buying up Chinese rice. Accordingly, cities along the North Korea-China border such as Jilin and Changbai are suffering noticeable rice shortages.

Suh, a Korean-Chinese residing in Changbai, told The Daily NK, "Due to merchants headed for North Korea blindly gathering whatever rice they can, the supply in Changbai has completely dried up. It is nearly impossible to see cheaper forms of rice any more, and the price of higher-quality rice has gone up."

North Korea officially closed Hyesan customs house at the beginning of December, prohibiting all trade until the end of January 2010. Meanwhile, due to the fact that setting prices was difficult immediately after the November 30th currency reform, food and other daily necessity transactions ceased in the North Korean markets, and government regulation permitted the sale of food in procurement stores only, since they are the places in which state price regulation remains feasible.

With the rice supply tumbling in this way, concerns over a food crisis rose sharply. On the 10th, a mother and daughter allegedly died of starvation in Gapsan, Yangkang Province, causing a swift response from a local Party concerned over the possibility of widespread unrest.

The North Korean authorities then started allowing imports as of December 11th, as well as permitting the entry of Chinese citizens intending to visit relatives in North Korea on the condition that they bring food into the country.

Before North Koreas currency reform, the Chinese authorities applied a preliminary reporting system to that rice which was due for export to the North, but since the redenomination it has not made any attempt to curb the outflow.

Until November, the price of rice in the markets of Changbai was as follows (unit: 25kg): 95~100 Yuan for first-grade rice, 85 Yuan for second-grade rice and around 70 Yuan for third-grade rice.

But as of the 26th, it was virtually impossible to purchase a large quantity of third-grade rice, and Chinese merchants had applied new prices; 120 Yuan for first-grade and 100 Yuan for second-grade rice; thats a 20% rise inside of a month.

Suh added, "The rice which usually goes into North Korea is third-grade, but with North Korean people taking rice out of China, the price has increased by 20%. Residents in Changbai have been shocked by the price of rice climbing in general, and the increase in the price of third-grade rice."

Due to the climate of the region surrounding the North Korean border, Changbai is not a rice-growing area. As a result of that, and recent harsh weather, the situation is being exacerbated. Suh explained, "It has been snowing heavily in China, which has resulted in traffic congestion in many places. Bringing rice from inland could help bring down the price, but in this current situation, the price will continue to go up."

Ceaseless North Korean smuggling also plays a role in the price increases. The Daily NKs Yangkang Province source explained, "Currently, in Hyesan, there is probably more rice being smuggled in than is coming in through customs. After the currency reform, the authorities prohibited the sale of daily necessities, so smugglers focused on rice instead.
 
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2017.12.14
Won Pyongyang Sinuiju Hyesan
Exchange Rate 8,000 8,000 8,025
Rice Price 4,800 4,900 5,200