Rice prices in North Korea, which took a downwards turn during March, have been increasing again during April. Many people are already feeling insecure about their food situation, especially with the period of spring poverty coming up in May and June.

This is unsurprising; however, the particularly worrying aspect is excessive price volatility.

A source from North Hamkyung Province told The Daily NK on the 20th, “In Namun Market in Hoiryeong, rice, which had been about 300 won per kilogram until late March, has increased to 500 won,” adding, “there were no special rations for Day of the Sun (April 15th, Kim Il Sung’s birthday). Given the rumor that national stores will not be enough, food prices are expected to keep increasing for the time being.”

According to the source, the current prices in Namun Market are 500 won per kilogram for rice and 260 won for coarse corn, so called “corn rice.”

The rising price of rice can be seen in Pyongyang too. There, distributed food rations were close to average in March and rice in the Sungyo Market had decreased to 200 won per kilogram as of March 29. However, by April 15th it had reached more than 300 won again.

One source said, interpreting the rice price volatility phenomenon, “In the past, rice prices depended entirely on whether there were food rations or not. Now, rice prices depend on the people’s mental state, too.”

Looking at rice price trends in Namun Market in Hoiryeong, which The Daily NK has been closely tracking, this analysis seems persuasive.

The day when markets, which had been closed down on the orders of the North Korean authorities right after the currency redenomination, reopened was February 5th. Right after the currency redenomination on November 30th, North Korean procurement stores had announced that rice would be sold at 24 won per kilogram. However, then they compromised with sellers by setting a rice price cap of 240 won in the markets. This did not engender confidence in state policy.

Therefore, despite static trade volumes, rice prices jumped to 1,500 won per kilogram after just a month (March 7th), but in less than another month they had decreased to 300 won (April 2nd), surprisingly close to the cap limit.

Sources point to this fluctuating phenomenon as an effect of the currency redenomination, and explain it in terms of “people’s distrust” of government policy.

The source explained, “The state’s policies, including the currency exchange, are nonsense. Since people do not trust those policies, they have not decided whether to keep their property in rice, foreign currency or domestic currency. Instead, they just wander with the market trends.”

The real problem starts now. Popular assumptions about food rations for big cities like Pyongyang are getting more and more negative, while North Korea’s ‘money party,’ during which wages were paid in the new currency in January and February, stopped in March. The statement from an official with the Chosun Central Bank, that “actual purchasing power has greatly increased,” is now an empty pledge.

Therefore, an atmosphere of insecurity is building in North Korea, which can add velocity to price rises.

The source predicted as much, saying, “Those who are quick-witted have already worked out that the food situation this spring will not get any better. As a rumor is circulating that food aid from the South or China will not come soon, rice prices are starting to soar again.”

Due to market psychology, which quickly reacts to any element, vulnerable classes are likely to face serious food supply problems soon.

The source said, “In this fluctuating market situation, those who have economic potential can increase their fortune, but fluctuating rice prices are a fatal element for those who live from hand to mouth.” He added, “While the authorities shout about the establishment of a strong and prosperous state, the people are very nervous that rice prices might go up to more than 1,000 or 2,000 won again.”

The fact that the authorities have not introduced any practical measures to cope with this situation is making people even more anxious. What measures there have been were to avoid the blame by punishing a few scapegoats, rather than to liberalize market activities and actually increase food circulation.

For example, a source reported that the manager of the Hyesan Branch of the Central Bank in Yangkang Province, Kim Seung Pil (59) was publicly shot near Hyesan Airport on March 25th on suspicion of embezzlement at the time of the currency redenomination. Additionally, a manager from Guseung Machine Tools Factory was also publicly executed in March on suspicion of illegally accumulating wealth during the redenomination period.

Defector experts say that they all had close relations with Park Nam Ki, who was reportedly executed on March 12th; they are political victims.

So, while rice prices in North Korea are now a serious problem for the poorer classes, they are also an important index which shows the stability of people’s livelihoods, and a reliable barometer with which to judge the state of North Korean society as a whole.