Rice Blazes Up to 3,500 Won

Lee Seok Young  |  2011-10-25 09:54
The price of rice has hit a new post-currency redenomination high of 3,500 won/kg in the markets of Hyesan in Yangkang Province, the latest in a period of seemingly inexorable rises.

A source from the city told The Daily NK yesterday, Chosun rice hit 3,500 won per kilo in Hyesan Market this morning. Chinese rice immediately followed suit by rising to 2,600 won.

As the price of rice rose, so the price of corn also rose, the source added. It was 850 won per kilo through the end of August, but today was selling for 1,300 won.

The source added that in Onsung, North Hamkyung Province things are only marginally better, saying that there Chosun rice is 3,300 won per kilo, while the price of Yuan has reached 580 won.

While yesterdays price does not represent an absolute record (in Sunam Market in Chongjin, prices hit 4,100 won on March 3rd, 2005) it is a post-currency redenomination record, and the first time that rice in redenominated currency has exceeded 3,000 won/kg. As recently as August, it was just 2,400 won.

This illuminates clearly the complete failure of state policy since the 2009 redenomination, immediately after which the authorities declared the price of rice to be a highly unrealistic 26 won/kg and stated that it would be sold by the state. When it was clear that this was not working and markets were allowed to open again on February 5th, 2010, it had still only reached 240 won/kg. Yesterdays price point marks an increase of 14 times over that day.

Importantly, whereas past cases of rapid, irregular price movements have been attributable to official policy, be it controls over market activities or bans on rice trading, this time there are no such controls or bans in place, nor are any unusual rumors circulating.

There were the August Storm Trooper and September Unit 828 inspections, but both were predicated on eradicating anti-socialist activities, the source explained. Despite the fact that there have been no recent state controls covering the trading of food, the price of rice keeps running away. Ordinary folk are very surprised by it.

However, the well-informed Daily NK source also said that he believes the root may lie with the relative value of the North Korean Won, which he explained is coming under unsustainable pressure due to recent state projects. He explained, When the price of the Yuan rises, doesnt the price of rice always rise, too? The current price of the Yuan in Hyesan is 570 won, and by the end of this month looks like it will exceed 600 won. On August 4th this year, the Yuan exchange rate stood at 410 won.

To buy in from abroad the materials needed for construction projects in Pyongyang, use of foreign currency by the state is growing, and as a result the overall demand for foreign currency is getting higher, too. The state sector and foreign currency-earners etc; everyone is looking for U.S. Dollars or Yuan, so the price of foreign currency is getting more and more expensive, he went on.
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