Trade and Rations Behind Stable Prices

North Koreas market rice
prices, used to gauge overall consumer prices, have been
maintaining a steady rate since last year, raising interest in the factors that have made this possible. According to sources within the country, an increase in
imports from China and steady rations from the state are believed to have
reduced price swings.

The state is giving us more rations
compared to the past, and the rice imports from China have made their way into the
markets, so prices have not seen much fluctuation,
source from Yangkang Province told Daily NK on Monday.
In Yangkang Province, only Hyesan Mine is receiving rations, but
despite this, the prices in the marketplace remain similar to when most
residents received rations last year.

Currently, 1kg of rice at the market in
Hyesan City trades for 4,500 KPW. This is down 800 KPW from the previous month,
he went on to explain, adding that this brings it down to the market
price on par during the period when rations were handed out at the beginning of
last year.

“In the past, the prices would have climbed
starting in December, when they have the annual wrap-up meetings kick off, and
continued to do so through the Solar New Year, Kim Jong Il
s birthday [Feb. 16th], the Lunar New Year, and Daeboreum [the first
full moon according to the lunar calendar, March 5th this year],
 he said. “But now there is no sign of that.”

Another source in North Hamkyung Province
confirmed similar trends.
Rice prices would have
already gone up by now in the past, but this year, the cost of rice and other
side dishes have not seen much change, so wives are at ease,
she said. “Market vendors and the overall
population are happy to have a bit of breathing room as a result of the stable

According to the source, the stability likely comes at least in part from
the increase in rations from the state, but is also thought to be linked with
the growing number of traders with China bringing an influx of rice into the
markets. In contrast to previous years, less surveillance
and control over the markets has seen an increasing number of merchants.

Similarly, prices in North Pyongan Province, a region directly bordering China, have also seen almost no major changes, hovering
around the 5,000 KPW mark this year. Sources in Sinuiju also supported similar
assertions that the relative stability stems from state rations and more trade
with China.

The KPW to USD exchange rate saw a minor
increase, but largely floated at approximately 8,000 KPW to 1 USD. Recently the
KPW has been trading for 8,100 KPW, 8,170 KPW, and 8,390 KPW in Pyongyang,
Sinuiju, and Hyesan markets, respectively. These represent respective increases
of 100 KPW, 170 KPW, and 240 KPW, but sources say considering the instability
of the overall market system, these shifts are insignificant.

On this development, another source based in Dandong, China explained, The exchange rate in North Koreas markets depends on how freely the vendors circulate RMB. If the
state cracks down on RMB, it [the exchange rate] can climb. Recently, however,
there has been a lack of oversight, meaning the rate has remained mostly

While RMB are widely used in border areas, other inland regions such as
Pyongyang trade predominantly in USD.
Last year and
this year, there has been an increase in sales in the market, so the dollar
supply has been stable, upholding the existing exchange rate,
he concluded.

Kang Mi Jin is a North Korean defector turned journalist who fled North Korea in 2009. She has a degree in economics and writes largely on marketization and economy-related issues for Daily NK. Questions about her articles can be directed to