Grain prices have recently been soaring at markets in the city of Hoeryong, in North Hamgyong Province, putting North Koreans under even more financial pressure.
Speaking on condition of anonymity, a source in the province told Daily NK on Apr. 5 that Hoeryong citizens are complaining about the cost of groceries following a recent rise in the price of grains, including rice and corn, at local markets.
“Rising rice prices are a major threat for people who are already finding it harder and harder to make a living. While rice is supposedly being imported from China, prices haven’t gone down, so those imports aren’t making it any easier for people to get by,” the source said.
As it turns out, the price of rice at one market in Hoeryong rose by KPW 800 (14.3%) from KPW 5,600 per kilogram in mid-March to KPW 6,400 per kilogram on Apr. 2. Corn was trading for KPW 3,300 per kilogram on the same date, representing a KWP 400 (13.8%) increase from KPW 2,900 in the middle of last month.
Grain vendors at North Korean markets also accept Chinese yuan or American dollars in place of the North Korean won after converting prices based on the current exchange rates. Since the won-yuan exchange rate at markets in Hoeryong has climbed to KPW 1,600, shoppers are better served by buying grain in yuan than in North Korean won, the source explained.
“When the won-yuan exchange rate was at KPW 1,300, KPW 6,400 worth of rice would cost RMB 4.9. But now that the exchange rate is up to KPW 1,600, you can buy the same amount for just RMB 4. So basically, purchasing rice in yuan right now can save you a lot of money,” the source explained.
Put another way, RMB 100 is enough to buy 20.4 kilograms of rice at RMB 4.9 per kilogram, but 25 kilograms at RMB 4 per kilogram. So since the exchange rate has risen from KPW 1,300 to KPW 1,600, shoppers can buy five kilograms more rice for the same amount of hard currency.
“People with foreign currency are typically well off, while people who are living hand to mouth don’t have foreign currency and have to buy items in local currency. So when grain prices go up, that just makes things harder on people who already have it pretty hard,” the source said.
“I suppose affluent people buy things with foreign currency, but most people try to hold on to it [instead of spending it] when exchange rates go up. So even the affluent aren’t hoarding rice right now, but they do use foreign currency on occasions when they need to buy a little rice because that’s a better deal.”
Translated by David Carruth. Edited by Robert Lauler.
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