Porridge market flourishes as price of rice in North Korea hits a low

Friday 8th May, 2015

While it appears to be good news for the citizens of North Korea, New Focus observes the impact it’s having on other industries.

Autumn is the season of rice, its higher yield leading to lower prices. Accordingly, the price of rice in North Korea falls during this annual period and skyrockets during another: spring.

However, New Focus’ North Korean correspondent reported over the phone on April 13 that “currently, the market price of rice in North Korea decreased unexpectedly, an all-time low for that season. The price of high-quality imported rice is between 4,200 to 4,500 Won. The price of North Korean corn is 1,800 Won whereas the price of imported corn is 1,600 Won.” The correspondent added that “100 Chinese Yuan is exchanged for 132,500 North Korean Won.”

The correspondent also said that the current price of rice is even lower in comparison to the past autumn, whilst the exchange rate, moving in the opposite direction, remains unfavourable for North Koreans.

Economic conditions and market trade across the country has greatly reduced along with the fall of the rice price. This has caused the general public, most of which are heavily dependent on markets, to experience financial hardship. One would expect that ordinary citizens in North Korea would benefit from the fall in the price of rice. On the contrary, the  opposite has turned out to be true.

What causes the rice price to fall in North Korea? Last year’s harvest was relatively good, and the state’s ration of a week’s worth of rice was distributed across the country in February. Our correspondent said that potato yields in Hyesan, Musan and Ganggye province were especially good, nearly double the amount in comparison to previous years.

Looking at other industries in the markets of North Korea – a vital part of the North Korean economy – it was observed that the sales rate across all products fell to a record low. Worst hit among the products are fabrics, the trade of which has almost stopped completely. Many seamstresses made their living in North Korea by buying Chinese fabrics by the kilogram, making clothes and selling them. But citizens are increasingly showing a preference toward higher quality clothing from South Korea and other parts of the world, smuggled across the China-North Korea border.

As a result of the diminishing demand for North Korean handmade clothes, seamstresses have stopped buying fabrics, slowing the fabric trade overall. Now fabric sellers are in need of a Plan B, with bolts of fabrics piling up in the corner of their houses.

The next career for these merchants? A popular choice is food, or more specifically, rice porridge, especially because it costs little to set up. Our correspondent reported that spiteful grumbling can be heard among other long-established vendors, regarding the many newcomers in the food industry.

North Koreans say that goods need to circulate consistently in the markets, even if it means that the price of rice or clothes remain high. Even with the high level of rice yields, the economy suffers in other areas, as the regime lacks pivotal economic bases. Furthermore, with the relationship between China and North Korea is strained, there have been perceptible decreases in exports and imports.

Our correspondent concluded the situation in North Korea by saying, “With reduced market trading, and almost all other forms of trading paralysed, North Koreans view their government with agitation. Though they wouldn’t say it out loud, people are envious of those who have family ties in China or South Korea. They say that having escaped relatives and family members is more important than political status or influence. At least they can provide some real financial support.”

 

Reporting by Park, Ju-Hee.

Translation by Sinae Hong.

Read in Korean.

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