Yanji, China — Skyrocketing rice price dropped dramatically in a short period of time, bringing misfortune to some rich traders who had hoarded rice.
An inside source from North Hamkyung Province said in a phone conversation with Daily NK on June 19, “Some people started hoarding huge volume of rice after hearing the rumor that the price of rice would go up as high as 5,000 won/kg. However, these people are now suffering heavy losses as the price has plunged dramatically lately. ”
The source said that around mid-late March this year, the price of rice started rising and a rumor began to circulate in the market that the price of rice would rise as high as four to five thousand won per kilogram. It was about that time when people with big fortunes started stockpiling rice, which further contributed to the increase of rice price, the source said.
“A friend of mine who worked at a trading company purchased 900 kilograms of Chinese rice at a cost of 3,100 won per kilogram late in May. Until today, he hasn’t sold any of his rice because the price continued to drop,” the source said. “My friend is in a great distress as many merchants, anticipating a continued decrease in rice price, are refusing to buy rice even at a cost of 1,900 won/kg,” the source said.
“Around the end of May, rice price started falling dramatically because another rumor began to circulate that rice aid from foreign countries would arrive at Nampo Port and merchants, upon hearing the rumor, rushed to bring out their rice for sale,” the source said. “Right now, those who borrowed money from family and relatives to hoard rice are going crazy over the situation,” the source added.
As of June 17, the price of rice in major border cities of North Korea ranges between 2,100 won/kg and 2,500 won/kg. In fact, the price of rice dropped almost by half in the last one month.
The source said, “When rice is sold at a cost of 2,300 won/kg in the market, rice retailers have probably paid at least 1,900 won/kg to wholesalers. This means rice retailers can only make 400 won per kilogram of rice.” According to the source, in mid-April rice retailers were buying a kilogram of rice from China for around 1,600 won and selling it for 2,200 won or so.”
In May, when the rice price went through the roof, rice was being sold for in the region of 5,000 won. Therefore, the profits of rice retailers were reduced by around 20 %.
The source added, “It seems that the price would continue to decrease. However, everyday, the price of rice fluctuates up and down, which makes difficult to estimate the exact price.”
