Corn Crashes Rice Price Party at Last

The price of rice apppears to be stabilizing in North Korea as the end of the autumn harvest brings corn to market. However, this year’s corn crop is known to have been below average, suggesting that the current improvement might not last.

According to a source from Shinuiju in North Pyongan Province, “The price has been falling steadily of late, and is currently 5,500won per kilo.” Corn is currently 2,000won/kg, the same source added. Meanwhile, a source in Hyesan reported that the price of a kilo of rice in the jangmadang there is currently 6000won.

The news means that prices have declined by between 200 and 600won since October 23rd in the two cities surveyed. This is the first rice price decline of more than 500won anywhere in North Korea since the start of the year. Indeed, the trend was inexorably upward for much of 2012; rising from 3,500won in January to 7,000won by October.

The Shinuiju source went on to explain the reason for the change, saying, “Corn, which is a substitute for rice, has entered the market, easing prices and improving people’s food supply. This has meant that rice prices stabilized. With all this talk of reform and opening measures there has been a lot of anxiety and prices everywhere were up around 7,000won at one point. This caused a lot of resentment, but some of that has been relieved now.”

The clearest sign that the current price decline is down to the arrival of domestic corn is that the Chinese Yuan to North Korean Won exchange rate has not moved even as the price of rice has fallen. As the Shinuiju source noted, “This current situation is not really sustainable, so the money changers have not moved at all. They are not going to release more Yuan into the market.”

Cautioning against irrational optimism, the Shinuiju source concluded, “This year’s corn harvest was hindered by drought and flooding, so it did not reach last year’s standard. When all the corn is sold, there is no reason why rice prices might not rise once again.”

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