Commodity prices and exchange rates in Sinuiju, a major hub for Sino-North Korean trade in North Korea’s North Pyongyan Province, have recently spiked following the shutdown of the country’s borders with China, Daily NK has learned.
“Prices of commodities have risen dramatically over the past couple of days since trade with China was suspended,” a source in North Pyongan Province told Daily NK on Jan. 4.
“The prices of manufactured goods and fruit that had entered China [before the suspension of trade] have already gone up, and now North Korean products are feeling the impact,” he added.
According to sources in the region, flour prices have risen by 47% to least KPW 6,175 from KWP 4,200 in early January. Soybean oil, which cost around KWP 9,350 in early January, is now KWP 15,570, a spike of 68%. Sugar has risen in price by 22% to KWP 6,400 compared to the KWP 5,250 it cost early last month.
Daily NK sources also reported that currency rates in Sinuju have risen precipitously.
The currency exchange rate between the KWP and USD increased by around 6% and is now KWP 8,800: 1 USD, an increase of KWP 500. The currency rate between the KWP and Chinese yuan, meanwhile, rose 14% to become KWP 1,380: 1 yuan, an increase of KWP 170.
While the KWP’s exchange rate with the dollar and yuan have continued to gradually rise since the start of the new year, the shutdown of North Korea’s border has almost certainly led to this recent spike.
“Merchants want to raise their prices but are unable to because they’re waiting for others to do it first,” the Sinuiju source told Daily NK. “If even one merchant decides to raise prices under the assumption that the current situation [lack of imports] will continue, everyone will start raising prices.”
“The government is likely to take action in regards to the sudden increase in commodity prices at the local markets,” the source continued. “There’s a high chance that state officials will soon start to set up price controls.”
North Korean law allows for the government to adjust market prices appropriately when need. Section 86 of North Korea’s “Socialist Commerce Act” states that markets are not allowed to sell products forbidden by law or that “exceed” price limits.
The prices of some foodstuffs in Pyongyang have also increased significantly, according to Daily NK sources.
Flour, which cost around KPW 4,200 in early January is now selling for KPW 6,250 – an increase of 49%. Soybean oil now costs KPW 15,500, a 63% jump from the KPW 9,500 it was selling for in early January. Finally, the price of sugar has jumped 29% to cost KPW 6,500, up from KPW 5,050 in early January.
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