Market prices remain in holding pattern

Although stronger sanctions on Pyongyang
are said to be negatively affecting North Korea’s trade with China, market
prices within the country appear to have remained relatively stable. A full
three weeks has passed since the international sanctions were put into effect,
but a noticeable impact on the daily lives of North Korean citizens has not yet
materialized. 

Rice is currently trading at 5,150, 5,090,
and 5,080 KPW per kilogram in Pyongyang, Sinuiju (South Pyongan Province), and
Hyesan (Yanggang Province), respectively, according to Daily NK sources. These
are not significantly different from prices recorded prior to the introduction
of the new sanctions (Pyongyang: 5,100 KPW, Sinuiju: 5,100 KPW, and Hyesan:
5,260 KPW).
 

Fluctuations have remained minimal for corn
prices as well. One kilogram of corn now fetches 2,100 KPW in Pyongyang, 2,190
KPW in Sinuiju, and 2,200 KPW in Hyesan, which is very similar to the
pre-sanctions period (Pyongyang: 2,160 KPW, Sinuiju: 2,140 KPW, Hyesan: 2,300
KPW).
 

“Rice, corn, potatoes, and grains are all
selling at the markets just as well as they did in the past,” a source from
Ryanggang Province told Daily NK on Wednesday. “For goods that we used to have
access to through the Kaesong Industrial Complex, the prices have surged, but
in general, there haven’t been that many changes.”
 

Foreign exchange rates have also remained
relatively stable with 1 USD trading for 8,128 KPW in Pyongyang, 8,150 KPW in
Sinuiju, and 8,065 KPW in Hyesan. In comparison to prior rates (Pyongyang:
8,200 KPW, Sinuiju and Hyesan 8,290 KPW), the local currency has strengthened
slightly against the greenback.
 

“There had been concern that the exchange
rate may climb due to a deterioration in relations with China, but for now at
least, there hasn’t been much change,” a different source in North Hamgyong
Province reported.
 

Senior Researcher Cho Bong Hyun from the
IBK Economic Research Institute attributed the stability to the fact that trade
channels have not been severed completely, allowing for a vast array of goods
to continue flowing through the porous border shared by the two countries.
However, Cho added, “I believe in two to three months’ time, North Korea’s
economy will experience a general downturn, pushing overall prices up.”
 

Cho additionally predicts that markets will
eventually be strained under the strong sanctions, but that the pressure could
lead to new forms of business among vendors. “Also, even if there are
restrictions from the outside, people will have greater incentives to turn to
illegal methods such as smuggling, thereby reestablishing market stability,” he
added.