Rice Tops Key 5,000 Won Mark

Lee Seok Young  |  2011-12-13 10:41
The price of rice in North Hamkyung Province and other areas along the Sino-North Korean border has passed 5,000 won per kilo. This represents a rise of over 1,000 won in little over a fortnight, after similar reports came out two weeks ago asserting that the price had passed 4,000 won in late November.

Sources have independently reported that the 5,000 won mark has been passed in markets in the cities of Hoeryeong and Musan, both in North Hamkyung Province, and Hyesan in Yangkang Province. The exchange rate of the Chinese Yuan against the North Korean won has simultaneously jumped from the low 700s to 800 in Hyesan and over 1,000 in Musan and Hoeryeong.

Reporting the news, one Hoeryeong-based source told The Daily NK, “The price rises have left people living hand-to-mouth, and the endless government controls and crackdowns mean people have no idea what to do. The atmosphere in the jangmadang has gotten really ugly on rumors that prices are going to rise further.”

A source from Musan pointed out, “The Yuan seems to go up every day, and now that rice has passed 5,000 won a kilo people have no idea what they’re going to eat to survive.”

“We’ve already given up on the idea of eating rice cake for the Chinese New Year,” the trading source from Hyesan said, going on, “Chosun rice now costs 5,000 won a kilo while Chinese rice is 3,800 won. Wherever you go people are up in arms about it.”

Most locals blame the rapid rise in the cost of living on the strength of the Yuan against the North Korean won. In this way, the lack of confidence in the local currency promoted and enhanced by the 2009 currency redenomination seems to be having a direct effect on the price of rice.

“Everybody prefers to use Renminbi to Chosun money, so by the time you wake up in the morning the thing which has risen again is the price of the Yuan. Because the exchange rate is rising, it is inevitable that the price of rice goes up as well,” the source from Hyesan explained.”

Interestingly, according to the border region sources there is no great difference in the physical volume of rice in the market. However, because the Yuan has become the main currency for both the supply and demand sides of the market, prices have risen in accordance with the change in the exchange rate. The use of the Yuan as the medium of exchange between locals was already becoming institutionalized even before the recent rises.

The rapid price rises are also encouraging traders to try and obtain more locally-grown rice.

The source from Hyesan said, “Train stations in North Hamgyung and Hwanghae Provinces are in complete chaos when there is a train because of all the traders trying to bring in local rice, as well as the agents regulating them,” while the source from Musan said, “Many people are stocking up on food while they can because of reports that food prices will keep rising until next spring.”
 
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2014.03.24
Won Pyongyang Sinuiju Hyesan
Exchange Rate 7,300 7,500 7,550
Rice Price 3,900 4,100 4,550