Mix of Factors Brings Rice Price Down

Food prices in North Korean markets have declined to their lowest point since the year began, with rice now holding steady at around 5,000won/kg in Pyongyang and 5,400won in the border city of Hyesan. The low prices appear to be a response to seasonal factors plus the ongoing distribution of a portion of wartime rice stocks.

The North Korean authorities opened wartime rice stores in March, seemingly in response to public anger at mass mobilization for military exercises that characterized the time. Distribution of food has been maintained on some level since then.

“They have been giving fifteen days of distribution to workers since March, based on the number of members in a family,” a source from Hyesan confirmed to Daily NK on the 2nd. “Most of it has been corn and the quality of the rice is poor, but they gave five and ten days of food through mid-June so life has been easier.” Ten days of food equals 4.5kg of grain for a factory worker, and 2kg for dependent family members.

A Pyongyang source confirmed the situation in the North Korean capital, saying, “We received distribution from the authorities in the middle of last month; it was mostly made up of new potatoes. Since then there has been a lot of grain on the market so the price of rice has fallen, and it has been in the low 5000s ever since.”

According to inside sources, the price of rice was in the 5,600-7,000won range from January to May, then entered the 5,500-6,300won range during May and into early June, before declining further in recent days.

Market prices fall naturally when market demand for grain declines following state distribution. Additional factors also compound the phenomenon: notably, Party cadres and other affluent groups tend to put their distributed rice directly into the market, since they don’t wish to consume the low-quality product, while the distribution of new potatoes to farmers simultaneously reduces rural demand for grain.

Also, according to the Hyesan source, “Poor people are less concerned with being unable to eat now and more worried about the future, so they sell their rice to gather money, too. Since cadres don’t normally eat their distributed rice either, when there is distribution it can seem as if everyone is trying to sell all their rice in the market at the same time.”

However, “The amounts being distributed are slowly decreasing, suggesting that their capacity to deliver distribution may have a limit,” the source warned. “The authorities say that distribution will continue, but people are not ready to believe that.”

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