North Korean authorities have finally opened the new state-run food stores they created to stabilize food prices. However, as the shops have yet to draw many customers, they are having little impact on grain prices in markets.
According to a Daily NK source in North Korea on Monday, the state-run food stores have begun operations in each region of the country, selling rice and corn.
Besides rice and corn, they currently sell no other grains or foodstuffs.
North Korean authorities planned for the state-run food stores to better control the supply and price of grains. There were delays in opening the new stores, however, with provincial and municipal party branches pursuing the plan with little vigor.
As word of the plan for the new stores spread, there was speculation about whether North Korean authorities intended to stop food-related transactions among private individuals and have the state monopolize such transactions.
Despite such fears, North Korean authorities have taken no measures to directly control or ban grain sales in markets with the opening of the new stores.
Moreover, though the state-run food stores sell rice for about KPW 200 per kilogram cheaper than in markets, ordinary North Korean prefer the rice sold in markets.
The new stores force consumers to buy no less than 10 kilograms or more of rice or corn. Moreover, the quality of rice is apparently low and the selection limited to only one variety. Accordingly, shoppers prefer going to the market where they can select higher quality rice.
In addition, locals in difficult financial straits find it onerous to purchase 10 kilograms or more of rice at a time.
As a result, the new food stores are playing something akin to the role of a middleman or wholesaler. Market grain sellers are currently the main customers of the stores and are purchasing rice at the stores to sell at their own market stalls.
That being said, the amount of grain a single household can purchase at the new stores is fixed, so individual merchants find it difficult to make bulk purchases.
“People don’t care if the state-run food stores open their doors or not,” said the source. “This means the food stores don’t yet mean much to the people.”
In fact, the new food stores appear to be having no impact on fluctuations in food prices in markets.
A Daily NK investigation has determined that as of May 18, a kilogram of rice at markets in Pyongyang, Sinuiju and Hyesan cost KPW 4,000, KPW 4,000,and KPW 4,200, respectively, with prices trending upward since March.
Compared with Mar. 7, when rice sold for KPW 3,700 in Pyongyang, KPW 3,900 in Sinuiju and KPW 4,050 in Hyesan, prices have climbed about three to eight percent. This increase in prices, however, is not likely due to the opening of the new stores.
The price of rice climbed to a certain degree last year as well because of the beginning of the “spring austerity season” in March.
“Rice prices always rise around this time,” the source told Daily NK, adding, “We can’t say grain prices rose in the markets because of the state-run food shops.”