This is “NK Market Trends,” bringing you
weekly updates on the North Korean economy. This week we sat down with reporter
Kang Mi Jin to discuss the latest trends; but first, let’s take a look at how
the jangmadang [market] did this past week.
We’ll begin by providing a rundown on the
price of rice, the currency conversion rates, and the cost of other goods in
North Korean markets. The price of 1 kg of rice was 5,100 KPW in Pyongyang,
5,100 KPW in Sinuiju and 5,500 KPW in Hyesan. The USD was trading at 8,315 KPW
in Pyongyang, 8,200 KPW in Sinuiju, and 8,020 KPW in Hyesan, which represents a
slight rise compared to last week’s rates.
Moving along, the cost of 1 kg of
corn kernels was 1,900 KPW in Pyongyang and Sinuiju and 2,000 KPW in Hyesan. One kg of
pork was selling at 13,500 KPW in Pyongyang, 14,000 KPW in Sinuiju, and 14,000
KPW in Hyesan. Gasoline was trading at 9,300 KPW per kg in Pyongyang and
Sinuiju and at 8,500 KPW per kg in Hyesan. Finally, 1 kg of diesel fuel was
selling at 5,200 KPW in Pyongyang and Sinuiju and 5,100 KPW in Hyesan. This has
been a weekly rundown on North Korea’s latest market prices.
1. Judging by the figures we’ve just seen,
it looks like the cost of goods is falling across the entire country. Can you
tell us a bit about that?
Yes, according to our inside sources, good
prices are falling all over the country. The cost of 1kg of rice was trading
for 5,100 KPW in South Pyongan Province’s Pyongsong Market. That’s 400 KPW less
than what it sold for last week. The cost of corn is now 1,900 KPW, which
represents a fall of about 400-500 KPW compared to last week. Additionally,
even though crackdowns and border controls are in full effect in the border
region of Yangkang Province, we thankfully saw a bit of a price decrease there
as well.
At the Hyesan Agricultural Market, rice was selling for 5,500 KPW per
kg, which is 500 KPW less than last week. This small decrease may seem like a
meaningless decrease to outsiders, but for North Koreans the extra money can be
spent on a cup of red pepper powder, garlic, or a full kg of salt. Considering
that corn and rice costs have both come down, residents have gotten a nice
little boost.
It wouldn’t be untrue to say that the price
of goods in North Korea’s markets is tightly related to the currency conversion
rate. There is news that the slight improvement in the exchange rate is one
factor that is helping to push the cost of goods down.
2. Last week, we talked a lot about the
price hike of potatoes, but now that we’ve seen rice get a little cheaper, am I
correct to infer that potatoes have also come down in price?
Yes, according to an inside source, the
cost of 1kg of potatoes at the Hyesan Agricultural Market was 1,000 KPW. This
is a whopping 50% reduction compared to last week. We’ve learned that this
sharp decrease is due to the harvest of early potatoes in Yangkang Province.
The source informed us that while the rest of the country has been hit hard by
drought, the northern provinces are a little better off, so the harvest has not
been too badly affected up there.
Information that affects North Korea’s
markets is always coming in and changing the cost of goods. That’s why we see
such drastic changes over short periods of time. Rumors about how devastating
the drought was and that the early potatoes would have a terrible harvest
pushed their price up to 2,000 KPW last week. And then when people learned that
the harvest was fine, the price plummeted to half that. This is what happens
when communication networks are so jammed up and inefficient. Regardless, the
price reduction of corn, rice, and potatoes came as fantastic news, and I know
that residents are breathing a sigh of relief.
3. So we’ve seen a widespread drop in the
cost of goods. How about areas like North and South Pyongan Provinces and areas
along the Yellow Sea? Are prices there being affected by the continuing
drought?
Well, our informants tell us that northern
inland areas are not being severely affected by the drought. So the drought has
presented pros and cons for the residents in places like North and South Hwanghae Provinces and North and South Pyongan Provinces. First of all, salt producing areas always get great yields in
drought years. That’s why the cost of salt has come down so much of late. So
people are saying that people are hoarding salt in order to prepare for kimchi-making season in the fall. Residents benefit from this planning because the
cost of salt tends to rise as we near kimchi-making season.
But outside of salt production, there
aren’t many benefits to the drought. The fall harvest is negatively affected,
and since rice, corn, and grains will likely get more expensive, other items in
the market will likely follow suit. That’s why the residents are really crossing
their fingers and praying for rain.
4. So it seems like you are saying that the
more or less successful early potato harvest helped bring down rice prices in
inland areas. What factors led to the price reduction in South Pyongan
Province, North Pyongan Province, and the Yellow Sea areas?
Ever since the ‘90s, the North Korean
authorities have laid down orders insisting on the development of quickly
developing seed varieties. This means that even when planted in the spring, the
seeds can germinate quickly and the produce can be ready to eat by mid summer.
The goal was to develop the rapidly developing seedling varieties for potatoes,
wheat, and Autumn greens, according to our inside informant. The result of this
development was that Northern inland areas saw an early harvest of potatoes
this year and and word is that quickly developing wheat and barley has been
developed to benefit areas like North and South Pyongan Provinces and both North and South Hwanghae
Provinces.
In June, 2000, I was traveling around South
Pyongan Province in Sinseong-cheon during what is known as the peak of the farm
hardship period. I was shocked to see that thing’s weren’t so bad. Although it
considered abnormal to go see one’s relatives during the farm hardship when
everyone was having such a hard time getting by could raise questions with the
authorities, I wanted to sell some Chinese products in the area so I paid off
the proper authorities in order to quell questions about why I was going to stay
with relatives.
The thing is, when I got to the area I was
totally surprised by what I saw. It was not as drastic a situation as I had
heard. People had enough to eat. Now I know that the increased food security
was due to the “early barley and wheat” seed varieties that had been developed.
I think that it is very likely that even today those seedlings from South
Pyongan Province and North and South Hwanghae Provinces are helping residents in those
areas to get by a little easier.
5. You’ve said that in most North Korean
markets, the cost of corn has come down, but do you think that other goods
related to corn will also come down in price as a result?
Yeah, I think you’re right on target with
that prediction. When rice or corn prices drop, so too does the cost of related
products. For instance, rice cakes and other treats made from rice always get
cheaper after rice costs drop. But the price reduction has not been as drastic
as the 400-500 KPW reduction that we saw with rice. But the prices of corn
related products tend to follow the rise and fall of corn prices quite closely.
For example, when corn prices decrease by 500 KPW, we can see corn soup reduce
in price from 500-700 KPW as a result. Also, “speed pancakes” or soek-do jeon,
also see a big price drop when corn prices decrease. These pancakes are made
from cornmeal and can be made quite quickly.
Moreover, since residents in rural areas
tend to prefer the use of grains as a means of trade more than cash, they
really benefit when corn prices fall because they get more purchasing power.
It’s equivalent to currency deflation. Since these price changes in the market
produce so much positive change for the residents, I hope that we see this
trend continue.
6. Can you explain specifically how a
reduction in the cost of foodstuffs influences the lives of ordinary residents?
I’d be happy to. First of all, price drops
bring much-needed food security to the residents of North Korea. But the
effects of a price drop are not entirely positive, according to an inside
source. From the seller’s point of view, a trend toward cheap prices can often
mean smaller profit margins.
For example, let’s consider the case of a
family who exclusively earns money by farming a small private plot. They
ordinarily sell their produce in order to purchase other goods at the market,
such as clothes, shoes, etc. While the cost of grains and produce easily
fluctuates in North Korea, the cost of clothes, manufactured goods, and
electronics does not. That’s why some are pointing out that produce price drops
are not universally positive market trends. It can negatively affect the
purchasing power of the lower class.
Others point out that the majority of
residents don’t need to buy such luxury goods. They are happy as long as the
price of food stays low. Both perspectives have validity.
7. Is that so? How about the rice
situation? Are people optimistic about the upcoming crop?
When we compile the reports we are getting
from our inside sources, we have reason to believe that most residents in the
plains areas of North and South Hwanghae Provinces and North and South Pyongan Provinces do not have big
expectations for the current rice crop. Since these regions are the big rice
producers for North Korea, a poor yield could have consequences for the country
as a whole. I think that most residents are most likely going to be in a
precarious food situation starting from this year until the fall of next year.
However, since the residents have gone without rations and distributions from
the regime for this long, I am confident that they will somehow find a way to
eke out a living.
Those listening to this broadcast in North
Korea will likely know what I mean by this. To conclude today’s broadcast, I
want to send a message to all those North Koreans slaving away in the sweltering
summer heat, being mobilized to toil on the farms for no pay. I want to send a
message of hope and affection from all of us defectors currently living in
South Korea.
