Markets See Quick Spike in Rice Prices

Market rice prices in
North Korea held steady throughout the “farming hardship period” in April and
May; however, prices have recently started to rise. In towns near the border,
including those in the provinces of Yangkang and North Hamkyung, rice has reached
6,000 KPW per kilo, inside sources report.

“From the end of last
week, the cost of rice began to rise, reaching 6,000 KPW,” a source in North
Hamkyung Province reported to Daily NK on the 25th. “All five of the markets in Hyesan, including
Yunbong, Masan and Hyesan, have seen the same sudden leap.”

“People are used to
small fluctuations in rice prices, but they don’t often see a quick 1,000 KPW
increase,” she went on.

A source in Yangkang Province
confirmed the increase. “Just a few days ago, rice was 5,000 KPW, so imagine my
surprise when I went to buy it yesterday,” she said. “It seems that even the
sellers don’t know why it happened.”

“They don’t need to be
sure why prices have risen; simply, if one raises the price of her rice, the
rest will follow suit,” she added.

The source went on to
say that she examined conditions across the city on Daily NK’s behalf, checking
markets in areas that could have been in a different condition. “Because miners are
receiving their rations, I thought maybe prices around mines would be stabler,” she reported, “but in Masan, one of those areas, it was also 6,000 KPW.”

Last month, rice cost
4,300 KPW in Pyongyang, 4,500 KPW in Sinuiji and 5,050 KPW in Hyesan. Moreover,
prices actually went down last week, to 4,250 KPW, 4,380 KPW and 4,800 KPW
respectively. But now they have increased by 1,000 KPW within a week.

Daily NK sources
speculate that the reason for the sharp increase is due to reduced distribution
of rice and below-average yield of early new potatoes. Of course, April and May
are called the “farming hardship period” for a reason; in other words, supply-side
limitations could simply be filtering down to the retail market.

According to the
source, local people are concerned that prices could rise to 7,000 KPW, the
high point reached during the mourning period for Kim Jong Il at the start of
2012. However, others are less worried, saying, “Since fall is right in front
of us, prices won’t rise any more.”

Although rice prices
usually vary in accordance with fluctuations in currency exchange rates, recent
ups and downs have not followed this pattern. Despite the fact that the North
Korean Won is currently 30 KPW stronger per Chinese Yuan higher than it was last month, rice prices have sharply
increased.

“In fifteen days,
people will harvest barley and have corn that was planted earlier. So rice
prices won’t go up any more,” the source in Yangkang Province said. However,
the source in North Hamkyung Province voiced the concern that “flooding from
the monsoon may influence yields of barley, corn and other grains.”

Analyzing the situation,
Kwon Tae Jin
of GS&J Institute said, “Rice is never
abundant in Hyesan; it must have been affected by drought in eastern parts of
China. Travel restrictions put in place to prevent the spread of diseases may
have contributed to the increase as well.”

“Once the corn is
harvested in August, prices will stabilize for a while. But a poor yield overall
could cause them to start rising later,” he predicted.
 

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