This is “NK Market Trends,” bringing you
news about the North Korean economy every week, and today, we are accompanied
by reporter Kang Mi Jin. But first, let’s take a look at the market’s
performance over the past week.
A kg of rice cost 4880 KPW in Pyongyang,
4800 KPW in Sinuiju, and 4750 KPW in Hyesan. A kg of corn kernels cost 1800 KPW
in Pyongyang and Sinuiju, and 1900 KPW in Hyesan. The exchange rate was 8500
KPW to the dollar in Pyongyang, 8760 KPW in Sinuiju, and 8800 KPW in Hyesan.
The exchange rate for the Chinese Renminbi was 1350 KPW per yuan in Pyongyang,
1320 KPW per yuan in Sinuiju, and 1310 KPW per yuan in Hyesan. A kg of pork
cost 11,000 KPW in Pyongyang, 11,500 KPW in Sinuiju, and 10,600 KPW in Hyesan.
A kg of gasoline cost 7400 KPW in Pyongyang, 7300 KPW in Sinuiju and Hyesan. A
kg of diesel cost 5350 KPW in Pyongyang, 5200 KPW in Sinuiju, and 5250 KPW in
Hyesan. This has been a rundown of the Weekly Marketplace Prices.
1. We’ve heard that it’s snowing in certain
parts of North Korea these days, which means that it’s time to find ways to
bundle up and beat the winter cold. It also means that it’s time to turn on the
heat at home. However, contrary to expectation, the price of wood and coal has
actually dropped recently. To find out why we’ll speak to reporter Kang Mi Jin,
who first uncovered this story. Can you tell us a bit more about this
unexpected development?
Certainly. As residents have busily
prepared for the winter season during the past two months, the price of winter
goods has decreased, according to an inside source. Just 40 days ago at the
start of October, firewood was selling for 185,000 KPW per cubic meter. Now,
the same quantity sells for just 150,000 KPW. That’s a reduction of 35,000 inside
a period of less than a month, which might be an unfortunate turn of events for
the merchants, but it’s definitely a boon for the consumers. The price of rice
in Hyesan is about 4800 KPW/kg right now. That means, with the savings
resulting from the price reduction in wood, residents can purchase 7 kg of
rice. There are plenty of residents who work hard all day long just to earn
enough for a single kg of rice. So this price reduction certainly comes as good
news for them.
2. Wow, that is quite a steep drop. But
that makes me wonder. Are the prices of other types of heating fuel – such as
coal and charcoal briquettes – also dropping?
In Yanggang Province, while the cost of
wood has dropped a staggering amount, the cost of coal has either dropped a bit
or remained stable compared to the previous month. Last month, coal was selling
for 336,000 KPW per ton in Hyesan. Now the price is 330,000 KPW. So this was a
very marginal drop indeed. Similar to coal, charcoal briquettes experienced a
very modest to non-existent price change. Yanggang Province has ample forests
but no coal mines, which explains why there was no major change in coal price
there. However, when there are changes to the price of coal in coal producing
places, that change will absolutely be reflected in the price of coal in
Yanggang Province as well.
The source explained that there are
transportation costs to haul the coal via truck from the production sites to
cities like Hyesan which have no local coal mines. But these costs don’t change
very much. The result is that coal prices in Hyesan usually only fluctuate when
there are changes to the production process. So the price of coal and charcoal
has remained pretty stable. The source also explained that in Yanggang Province
the amount of families who heat their homes using charcoal briquettes is on the
rise.
3. That’s interesting. Seeing as Yanggang
Province is a heavily forested region, it seems a bit unusual that people would
take to charcoal like that. What might account for this?
I’d be happy to explain. So, a little bit
ago we spoke with a resident in Yanggang Province who explained that people in
the area were starting to use coal. Although it can be a bit messy when cooking
and ash can fly all over the place, charcoal is simply cheaper than tinder,
which explains why residents are using it to heat their home. Although the
savings is meager, saving money in any way possible is extremely important for
North Korean residents. When I lived in North Korea, I burned wood exclusively.
But there were times when I went to relatives homes and they were using
charcoal. If you don’t properly grab the burnt briquettes with a pair of tongs,
the brittle chunks can flake off and turn into dust. I remember thinking what a
pain it was to clean up.
Firewood, on the other hand, doesn’t flake
up and turn into dust. It’s easier to tend to as well because it doesn’t need
to be replaced as often as charcoal. Finally, it doesn’t make a mess in the
kitchen. A relative told me a funny observation about this. Her husband
was a Party cadre, and he received bribes in the form of charcoal. Part of me
was jealous of my friend for getting this coal for free, but I also kind of
resented her for it. Blackmail is the thing that enables cadres to live fat and
happy while the rest of the population has to struggle to make a living in
order to earn enough to be able to bribe those cadres. When I remember times
like this, my conviction that North Korea needs to become a more equitable
society becomes even stronger.
4. I couldn’t agree more, especially when I
hear stories like this that reveal how cadres live the easy life while ordinary
folks are living hand to mouth. When you compare coal with firewood, is it safe
to say that coal is more cost effective to use?
Yes, that’s right. As I said earlier, by
looking at whether residents elect to use coal or wood as their tinder, we can
know a lot about their lifestyle and socio-economic class. It’s also possible
to know about their work conditions. First of all, those with the means to
afford it have a higher probability of selecting firewood to keep their house
warm. If you calculate the price of the total amount of wood needed for the
winter season, it comes out to about 5 cubic meters or 2 tons of coal. So the
total cost of wood would be about 750,000 KPW (about US $90.70), and the total
cost of coal would be about 660,000 KPW (about US $79.90). When I break down
the prices like this, I think it becomes evident what kind of resident would
buy the more expensive option.
Those who use wood pay
90,000 KPW (~ US $10.90) more than those who pay for coal. This might not sound
like a big difference, but for many North Korean residents who are forced to
scrimp and save, this is a significant amount. That is why our source has
alerted us that, as a generality, the well-off residents tend to use firewood.
Furthermore, with the pre-split firewood,
all you have to do is grab a couple handfuls and bring them in from storage.
It’s harder to use coal. First you need to cut the coal and then dry it out in
the sun. After a few days, you have to carefully put that in storage. Then,
when it’s time to heat the house, it’s quite a nuisance because you have to go
back and forth from the storage to the stove. Compared to wood, using coal is a
pain in the neck.
5. Last time you explained a bit about how
wood enters the marketplace, but I’m curious how transportation networks bring
coal to Pyongyang Province, which has no coal mines of its own.
First of all, coal gets imported to North
Hamgyong’s Myongchon County. Then the merchants go to mines in Myongchon to
purchase and load up with coal. Truckers rent out spots to merchants who ride
along and pay to use the trucks to transport the coal. They will sometimes
bring Yanggang Province’s specialty potatoes to sell at high prices in areas
around the mine. They also use the potatoes to get a better deal on coal by
including them in the exchange. Coal merchants typically gather together so
they can split costs. This includes truck rental, trip fees, gas money. These
costs are all reflected in the final price of the coal when the merchants bring
it into Hyesan. Many of the coal merchants around the country engage in
business in a similar manner to this.
We’ve heard that both merchants who operate
their own trucks and those who rent space on a truck earn a significant profit.
In their luckiest days, they purchase the coal at low prices and make money
hand over fist. However, once they get to Hyesan, they have to set prices at
market-determined rates. Usually, the coal merchants don’t make the final sale
to the consumers. Rather, they sell to middlemen who go around to villages and
towns selling large amounts at a single time.
6. It’s sometimes said that overall North
Korean’s lives are improving, but there are still a good amount of people who
still have a tough life. I’m curious how people save up enough money to buy
coal and firewood in bulk.
Since coming to power, the Kim Jong Un
regime has done very few market crackdowns. The result of this is that
residents are able to make a much better living these days than they did in
years past. However, there are still families that struggle to financially plan
and save beyond the next meal. For these people, purchasing tinder in bulk is
rather difficult.
In these instances, the poorer residents
tend to purchase wood or coal in smaller amounts. It’s a bit less convenient,
but they can get along well enough. At the market, there are vendors who sell wood
for small bundles of 8 or 12. There are also vendors who sell charcoal by the
brick, and our source indicates that there are indeed people who are so hard up
for money that they need to buy a day’s worth of heating fuel in a time.
But these small amounts are only available
for purchase in city markets. In the countryside, it’s more common to buy a
whole season’s worth in a single purchase. When I was in North Korea, after the
fall harvest, I would go up into the mountains for a few days and collect firewood.
Upon my return, I would make enough kimchi for the whole year. That way, when
it was time to ring in the new year, I could rest at ease knowing that my
family would be provided for during the frigid winter.
I know that our North Korean listeners are
putting a lot of thought and effort into preparing for the winter season.
Compared to South Korea, it’s really cold up there, so I hope that you all can
bundle up and stay warm. Until next time, Goodbye!
