North Korean market prices have surged across the board after briefly appearing to stabilize. Rice prices in North Korean markets have broken into the 13,000 won range for the first time since the country’s 2009 currency reform. The government’s control policies, disconnected from people’s daily lives, appear to be worsening market chaos.
According to Daily NK’s regular survey of North Korean market prices, rice prices that hit the 12,000 won range per kilogram last month reached new highs again in early July.
On July 5, rice sold for 13,500 North Korean won per kilogram at a Pyongyang market. That’s a 12.5% jump from the previous survey on June 22, when rice cost 12,000 won.
Other regions saw similar sharp increases. At a market in Hyesan, Ryanggang province, rice traded at 13,700 won per kilogram on July 5 — a 12.3% increase from two weeks earlier.
Corn prices, which had stabilized due to harvests of alternative crops like wheat and barley, also rose across the board.
In Pyongyang on July 5, corn sold for 4,400 won per kilogram, up 10% from the previous survey. That same day in Sinuiju, North Pyongan province, corn traded at 4,500 won per kilogram — an 18.4% surge in two weeks.
Exchange rates hit record highs
Daily NK’s survey found that on July 5, one dollar traded for 30,700 North Korean won in Pyongyang. That’s an 11.6% increase from the won-dollar market rate of 27,500 won on June 22.
Similar increases in the North Korean won-dollar market rate were observed in other regions including Sinuiju and Hyesan.
The North Korean won-dollar market rate had held steady in the 8,000 won range for years before the coronavirus pandemic. After COVID-19, trade recovery and increased foreign currency demand from authorities’ “20×10 Regional Development Policy,” combined with salary increases for North Koreans, caused the rate to surge to around 12,000 won in the first half of 2024.
The rate continued climbing, breaking 20,000 won last December. Since May, it has risen nearly 20% each month, recently breaking into the 30,000 won range.
The won-yuan exchange rate also hit record highs. On July 5, the North Korean won-yuan market rates in Sinuiju and Hyesan reached 4,150 won and 4,200 won respectively — all-time highs. This marks the first time the yuan rate has soared into the 4,000 won range since Daily NK began tracking exchange rates.
Multiple factors at play
The sharp rise in North Korean foreign exchange rates appears to stem from multiple factors: increased smuggling trade between North Korea and China, increased cash circulation and declining won value following salary increases, and authorities’ strict controls on food sales and currency exchange to suppress price increases.
Inside North Korea, some point to the government’s unilateral market control policies that ignore reality as fueling price increases.
A Pyongyang source said tighter controls on market traders’ activities have led to a significant increase in secret buying and selling at homes and third-party locations rather than at official markets, driving prices sky-high.
Meanwhile, rising foreign exchange rates and declining won values have caused import prices to surge across the board. On July 5 in Pyongyang, prices for major imported goods including gasoline, diesel, cooking oil, sugar and flour were about 10% higher than two weeks earlier.
