Market prices jump from smuggling crackdown

This
is “NK Market Trends,” bringing you news about the North Korean economy every
week. This week we sat down with reporter Kang Mi Jin to discuss North Korea’s
market trends; but first, let’s take a look at how the market did this past
week.

Every
week we bring you the current price of rice in North Korea as well as the
exchange rate and other items of interest. First, the price of rice. Rice is
selling for 5,000 KPW per kg in Pyongyang and Sinuiju and for 5,200 KPW per kg
in Hyesan. The exchange rate has slightly increased since last week with 8,130
KPW to the dollar in Pyongyang, 8,290 KPW to the dollar in Sinuiju, and 8,480
KPW to the dollar in Hyesan. Next, corn kernels are selling for 2,000 KPW per kg in
Pyongyang and Sinuiju and for 2,150 KPW per kg in Hyesan. Pork is selling for
11,000 KPW per kg in Pyongyang, 12,000 KPW per kg in Sinuiju, and 12,000 KPW
per kg in Hyesan. Nex is the price of gas. Gasoline is selling for 9,450 KPW
per kg in Pyongyang and Sinuiju and for 8,450 KPW per kg in Hyesan while diesel
is selling for 5,100 per kg in Pyongyang, 5,200 KPW per kg in Sinuiju, and
5,200 KPW per kg in Hyesan. That’s it for our weekly North Korea market update.

1. Last
week, you told us that the price of rice in most North Korean markets facing
the spring hardship period were stabilizing but prices are now said to be
increasing slowly. It’s been reported that the price of rice generally
fluctuates around this time of the year and that certainly seems to be true.
Can you tell us about current trends for the price of rice in the market?
 

Yes,
even up until last week, the price of rice in the market was maintaining
stability in the mid 4,000 KPW range but according to a source in North Korea,
the cost of grains like rice and side dishes have increases. Currently, rice in
five markets in Hyesan is being sold at 5,200 KPW per kg, around a 700 KPW
increase since last week. Fluctuations were predicted due to the start of the
farming season but our source stated that prices increased much more than what
was expected.

According
to sources, people are already growing nervous about the jump of rice prices
from the 4,000 KPW range to the 5,000 KPW range as this is a time when the cost
of rice has traditionally risen. Additionally, due to the hardship period,
farmers of small gardens packing lunches will also be affected if prices
increase.

2.  It’s also said that the price of other sides are
also increasing. Please explain.

Yes,
last week, the underground storage of potatoes was released so the prices of
sides like potatoes dropped but now it is
potato
planting season so the people don’t even have potatoes to sell in the market.
Of course prices will increase when there aren’t items available in the market
so merchants aware of the limited stock have slowly increased prices. Our
source reported that the prices for sides like potatoes have increased. It can
also be said that the lack of potato cultivation causing a large increase of
selling in spinach and other spring greens is also a cause of the increase. The
source explained that although some people are selling greens like spinach that’s
been cultivated in personal greenhouses, it is not enough to drop prices.
However, the source did say that the price of spring greens does seem as if it
will decrease in a few days because most families are selling vegetables like spinach,
cabbage, and radish that has grown somewhat.

In mid May, I used to cut the early planted
spinach and pickle it or sell some of it in the market to buy salt or other seasoning.
There are probably families who buying necessities through similar methods.

3.
Why has the cost of rice, which was stable even up until last week, increased
so suddenly?

I was also very curious about that. I was
happy because until recently, the price of rice had dropped and was showing
trends of stability and I was hoping that the stability would continue so that
people’s worries over food could be somewhat lessened in the hardship period.
Yet according to reports from our source, raids in border regions are the cause
of increase in the price of goods. It seems that the price of goods like rice
brought in by smugglers is largely affected by the rise and drop of prices in
border regions of North Korea. The analysis is that the price of rice in the
market has fluctuated as smuggling has been almost completely stopped by the
recent raids and smuggled goods like rice has even been confiscated. Our source
in North Korea reported that yesterday, some smugglers were detained by the State Security Department and others evacuated early on in the raids. The source
expressed resentment about the raids, stating that it was ultimately the people
that would suffer most. I think perhaps the North Korean people must consider
how they must always suffer crackdowns along with constant regulation and
surveillance.

Last week, I said I felt relieved that the
decrease and stability of rice prices would provide some aid in the people’s
lives as they approached the spring hardship period but not much later, I am
now forced to deliver heavy news. Regardless, I just hope that although they
may not feel at ease, the North Korean people will not live in absolute
suffering.

4.There have been analyses that people’s livelihoods reached stability due to market activities during a
lack of market regulations by North Korean authorities in recent years. Could
there be other causes for the fluctuations of prices for goods like rice
besides the recent raids?  
         

Yes, the source did say that the people
felt positive about the lack of greater market regulations by North Korean
authorities but the including the recent raid, current raids by the North
Korean authorities are generally focused on concerns like communications with
outside parties, infiltration of capitalist ideas through the inflow of goods,
and leaking of inside information. From the perspective of North Korean
authorities, they really don’t want any leaking of inside information, right?

I wonder if that’s why they had no choice
but to crackdown on and regulate smuggling through this recent raid. During
every raid, the North Korean people also say that authorities targeted
smugglers because they no longer believe there is such thing as smuggling
solely for survival. Authorities have determined that even the conversations
during smuggling operations leak inside information and bring in outside
information.

During raids under these conditions,
smugglers are all facing crackdowns and regulation and therefore the quantity
of smuggled goods like food products have decreased. In 2011, there were
approximately 1,000 smugglers in Hyesan, Yangkangdo but it is believed that now
the number is much higher. The number of smugglers increased significantly because
starting from Kim Jong Un’s regime, market operations were completed
unregulated.

If goods like rice that were smuggled in
every day or every few days by over 1,000 smugglers cannot enter the market due
to such raids, the availability of grains in the market decreases as well. With
a limited quantity, merchants are forced to raise prices. I believe these
factors are affecting the market price of rice.

5. Border control by North Korean authorities
won’t ease up; if anything it will only get worse. I think such border control
by North Korean authorities will also affect the increase of the price of rice
or other items. What do you think?

Yes,
unless the price of rice decreases due to plentiful farming in North Korea, as
border control increases, it seems the price of food will also increase. Of our
sources, there are many who sell rice that has been smuggled in so they have
unanimously stated that the crackdown on smuggles has increased market prices. This
means that the quantity of goods brought in by smugglers is nothing to be
laughed at. There are also many complaints wishing that there weren’t
crackdowns on things like food smuggled into North Korea.

It’s highly unlikely that authorities will
listen to these complaints but our source says that these are the grumblings of
the upset people. Our source also said that the market price of rice does drop
with supplies of rice provided by the state but after this incident, they
realized the grave importance of rice brought into the market through
smuggling. I personally think that smugglers are providing help by taking care
of food supplies, something the North Korean authorities should do. I feel the authorities
should instead be grateful to the people for trying to survive without reaching
out to the government for help. Regardless, I hope the North Korean authorities
quickly resolve the border control matter and stop hurting the livelihood of
the people.

6. Due to the increase of rice prices, I’m
sure the anxiety in the hearts of the people has increased as well. It seems
it’ll be harder on women, who have taken responsibility for the survival. What
do you think?

Yes, you’re right. Since the mid 90s, North
Korean women have taken responsibility for the livelihood of their families so
they are very sensitive to fluctuations in market prices. During the past
couple months when rice prices dropped and stayed that way, it seems women
would have strategically purchased food and other necessities for the home. In
those times, smiles would have lit up the faces of the women in the midst of
their busy lives but now, when rice prices rise and fluctuations are harsh,
they rarely have reason to smile. They can’t make much money and in a situation
where they have many assignments to submit and mobilizations cease to end, the
livelihood of the family is a heavy burden for housewives to bear.

Unlike times of stable rice prices,
housewives will have to cut down on necessities and decrease the quantity of
food or try to use cheaper alternatives as substitutes during times of
fluctuations. For example, they’ll try to save money on rice by buying things
like corn or noodles that can be bloated and are relatively cheaper than rice; they’ll also try to consume more vegetables instead of rice.

Our source said that for these reasons, merchants
are not doing very well and their livelihoods could be affected as well. The
merchants increase prices due to the limited quantity so the rice doesn’t sell
but in a situation where smuggling has been cut off, it’s not like they can afford
to sell rice at a cheap price. Ultimately, merchants are forced to increase
prices, but as a result, sales have slowed and they aren’t able to
make any money. Sources say that the merchants cannot help but to also opt for
noodles.

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