Coal export prices to China falling in Ryanggang Province despite increasing trade

[As Heard in North Korea]
Unification Media Group  |  2016-11-04 14:56

"As Heard in North Korea" articles contain the content of Unification Media Group [UMG] radio broadcasts into North Korea. UMG is a consortium created by Radio Free Chosun [RFC] and Open Radio for North Korea [ONK], shortwave radio stations targeting North Korea; The Daily NK, an internet periodical reporting on all aspects of North Korea; and OTV, an NGO-based internet television channel.

It's time for another episode of the weekly series Market Trends, where we look at the latest developments in North Korea's economy. We will continue to talk about the winter preparations by North Korean residents with special correspondent Kang Mi Jin. Last time, you talked to us about purchasing winter supplies in the North. What will be the topic for today?

By looking at the warmer clothes that people are wearing on their way to work these days, we can sense that the weather has gotten much colder. I used to wear lighter clothes coming to work until just last week, but now I need a sweater. In my early years after arriving in South Korea, I always felt awful at this time of the year thinking about the hardships of the North Korean people preparing for winter.

Today I would like to explain how North Korean residents source their firewood and coal. Ill also cover the differences between city dwellers and rural villagers, and between higher ranking officials and poorer citizens in preparing for the winter. 

I heard that kimchi preparation and collecting firewood are the two basic steps for winter preparation among North Korean citizens. On average, how much firewood does a family need to endure the winter?

The amount of firewood depends on the size of the house, economic conditions, and other factors. There are also differences between city and rural areas, and between regions that use coal for heating and regions that use firewood. Some people even use grass or dried foliage as an alternative to firewood. As the residents prepare for winter in accordance with their own circumstances, it is not easy to guess the average quantity of firewood needed for one family.

Residents living in rural areas of Ryanggang Province usually prepare approximately five cubic meters of firewood for winter. Villagers often light up their home furnaces in the afternoon as well as in the mornings and evenings. They also have to use relatively larger amounts of firewood for cooking, as theres a lot of the type of food that needs to be cooked in the area. I used to live in a rural area myself and when I visited my relatives in the cities, I realized that city houses are not as well heated as country houses during the winter. The houses in the cities are not designed to spread heat throughout the house like the flat stone heating systems do in country houses, and people in the cities also don't heat their houses as often. So for people in the urban areas, 3~3.3 cubic meters of firewood is said to be enough to last the winter.

Because the city dwellers use less firewood, wouldn't it be cheaper for them?

Thats not necessarily the case. The city dwellers have to buy their winter firewood in the markets or from forest areas, while country people can gather it themselves from the surroundings. Cutting the wood of course takes time and energy, but it saves money. Unlike the city folk who can make money through their daily businesses, rural villagers find it difficult to earn cash. So for this reason, even though city dwellers use less firewood, they spend more money to get it. 

So thats why theyre saying that the livelihoods of people in the cities will be put in jeopardy if theyre not able to do business. You told us that there are even people who use grass or foliage for winter heating. Can you give us more details about that?

There are some regions between the cities and the farm villages where logging is not possible. For example, you are not allowed to cut trees in the regions close to power plants or military bases. There are also mountains that are just bare due to unregulated logging in the past. Therefore, people living in these areas have no other means to heat their houses but to collect strong grasses like wormwood stalks or other perennial plants that grow and use them instead.  

People in these areas have a lot more work than others in preparing for winter because theres usually a lot of competition to collect the limited amount of grass and foliage. The latecomers have no choice but to buy their firewood at the market, for which they usually need to pay a delivery fee on top of the product price. To avoid this situation, most residents in these regions are busy working day and night. 

The residents must be so exhausted. Doesn't it take a much larger amount of material to heat a house with grass and foliage?

Thats probably true.

Then how about those who use coal for heating?

Normally, it takes about 2 tons of coal for winter heating per family. In some regions where coal is abundant, people are said to be collecting coal from nearby mines, but most people have to buy it at the market. Currently, the price of a ton of coal is 311,000 KPW at Hyesan market in Ryanggang Province, which dropped by 20,000 KPW from last month. In order to prepare 2 tons of coal, approximately 620,000 KPW is required. This shows that preparing coal for winter heating costs about 200,000 KPW more than using firewood. But consumption varies by household.

Recently, there have been rumors that the price of coal exported to China has soared up to 100 USD per ton. Then why is the domestic coal price declining in North Korea?

First of all, its not really applicable to compare the coal price in Ryanggang Province to that of export coal. The coal sold to residents in Ryanggang is strictly for domestic consumption. The coal for export (typically anthracite) cannot be mixed with lower quality [domestic-use] coal due to the rigorous quality checks. But these rules do not apply to coal for domestic consumption. 

There are also price gaps for coal between the regions. In regions where exported coal is produced such as South Pyongan Province or Sariwon (in North Hwanghae Province), the price is naturally influenced by the export price. But in other regions including Ryanggang Province, the fluctuation in coal price solely depends on supply and demand.

We'll close with a rundown of the jangmadang prices.

One kilogram of rice cost KPW 5,800 in Pyongyang, KPW 5,400 in Sinuiju, and KPW 5,800 in Hyesan. One kilogram of corn kernels cost KPW 1,100 in Pyongyang and Sinuiju, and KPW 1,150 in Hyesan.

One dollar was trading at KPW 8,140 in Pyongyang, KPW 8,105 in Sinuiju, and KPW 8,140 in Hyesan. One yuan was trading at KPW 1,200 in Pyongyang, KPW 1,150 in Sinuiju, and 1,200 in Hyesan.

One kilogram of pork sold at KPW 12,000 in Pyongyang, KPW 11,100 in Sinuiju, and KPW 10,500 in Hyesan. One kilogram of gasoline sold for KPW 7,650 in Pyongyang, KPW 7,750 in Sinuiju, and KPW 7,800 in Hyesan. One kilogram of diesel sold for KPW 6,000 in Pyongyang, KPW 6,150 in Sinuiju, and KPW 6,100 in Hyesan.  

*Prices current as of October 28

*Translated by Yejie Kim
*Edited by Lee Farrand

 
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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