Rice Prices Spiraling Upward

Park Jun Hyeong  |  2011-08-20 16:34
The price of rice is rising rapidly in the North Korean market. As of August 19th, rice was being traded for 2,600~2,700 won per kilogram in Pyongyang, a 500 won (23.4%) rise over early August.

The same is true of other areas. As of August 16th, in Chongjin, North Hamkyung Province rice was trading at 2,300 won per kilogram, in Onsung at 2,500 and in Hyesan at 2,400, an increase of between 100 and 300 won in each case.

North Korean traders newly arrived in Dandong told The Daily NK on the 19th, From last week, the price started rising unexpectedly, before adding, it seems that corn farming didnt go well and anticipated rises in the rice price due to flooding have exceeded expectations.

Until recently, rice prices tended to decline slightly when potatoes and corn entered the market between June and August. However, for a number of years including this year, the price of rice has been trending upwards due to poor corn and potato crops, themselves down to a lack of fertilizer and natural disasters.

Dr. Kim Young Hun of the Korean Rural Economic Institute explained to The Daily NK, A decrease in the amount of rice produced last year and food produced in the spring and summer creates this short-term, slight increase in the rice price.

An increase in the value of the Chinese Yuan is also a factor; last week 100 RMB could be bought for 39,000 won; now the same amount costs 41,000 won.

In the border areas, the activities of so-called Storm Troopers also seem to be affecting the rice price.

A source in Yangkang Province explained, Due to numerous Storm Trooper inspections, even people who have rice wont sell it in the black market, and when they do they just sell small amounts.

If even large scale sellers bring out rice, the source added, they could be suspected of smuggling. Therefore, they are controlling the supply. Sellers are also deliberately holding onto stocks of rice because they suspect there will be further rises.

Due to floods and a lack of fertilizer, there is also the risk that harvests could reach record lows this year, fuelling concerns about the possibility of prolonged high prices.
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