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Rice prices in North Korea fall due to harvest, imports

Monday, November 7th, 2016

Benjamin Katzeff Silberstein

Says the indispensable Daily NK:

Rice prices in some regions of North Korea have reportedly fallen by approximately 1000 KPW over the last few days. The price of rice has generally hovered around 5000 KPW per kilo since Kim Jong Un took power, but recently dropped to 3500 KPW due to an increase in supply from the harvest season and rice imports.
A Daily NK source in North Hwanghae Province reported on November 3 that the price of one kilo of rice was about 4800 KPW in the middle of last month, but has now fallen to 3500 KPW over the last few days.
“People are happy about the price drop,” she said.
“Although rice prices in the markets around the northern regions (North Hamgyong Province, Ryanggang Province) are continuing to average 5000 KPW per kilo, it’s being sold at 3500 KPW per kilo in the rural areas of North and South Hwanghae Provinces. It’s believed that this was caused by a fairly good harvest in the agricultural zones of the provinces of North and South Pyongan and North and South Hwanghae, which was better than last year.”
In North Korea, rice prices fluctuate in accordance with grain production. During the harvest season, prices tend to drop when increasing volumes of rice enter the market, most of which occurs via embezzlement channels set up by officials.
“During the harvest season, officials in charge of the farms embezzle a proportion of the rice for themselves and sell it at the market, which seems to be the reason for the recent decline in rice prices,” the source said.
In addition, public sentiment towards the change in prices also has an impact on prices. Rumors have been spreading among the residents that large volumes of rice will be donated by UN agencies, prompting vendors to try and sell their own product more quickly.
There has also reportedly been an influx of imported rice into the market, further driving up competition.
Addressing this phenomenon, VOA (Voice of America) reported that since the Kim Jong regime came to power, North Korea imported the largest volume of rice from China on record (on monthly basis) in September. According to an analysis of recordings from the Chinese General Administration of Customs by Kwon Tae Jin (director of the Center for Studies on North Korea and Northeast Asia at the GS&J Institute), the volume of Chinese grain imported into North Korea in September reached a total of 18,877 tons.
“Upon seeing the imported rice being sold in the market, local merchants have dropped their prices to try and sell all of their product. The wholesale dealers and vendors in the rice trade all seem a bit confused by the rapid fluctuations in price,” added a source in South Hwanghae Province.
However, this phenomenon may only be a temporary occurrence, as rice prices in other regions remain relatively stable. As the rice influx circulates among the other regions, it is thought that prices will stabilize.
Cho Bong Hyun, the deputy director of IBK Economic Research Institute further commented that, “the regime seems to be distributing large amounts of imported rice to placate the population, but there are issues with the sustainability of this practice. Unless the total volume of incoming rice remains steady, the price declines seen will not be sustained for long.”
Full article:
Rice prices fall to 3500 KPW per kilo due to harvest season and import spike
Seol Song Ah
Daily NK
2016-11-07
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Posted in Agriculture, Agriculture statistics, Statistics | Comments Closed

North Korea imports large quantities of rice in September: VOA

Thursday, November 3rd, 2016

Benjamin Katzeff Silberstein 

Via Yonhap:

North Korea imported the largest-ever amount of rice from China on a monthly basis in September since the launch of the Kim Jong-un regime in 2011, in an apparent bid to stabilize prices, a U.S. broadcaster, monitored here, reported Thursday.

North Korea imported 18,477 tons of rice and other grains in September, the Voice of America said, citing an analysis of data from China’s General Administration of Customs by Kwon Tae-jin, director of East Asia research at GS&J Institute in South Korea.

The September figure was about 2.7 times higher than 6,954 tons imported in October and about six times higher than 3,158 tons imported a year ago in September, the broadcaster said.

In particular, the North purchased 16,000 tons of rice from China in September, a monthly high since the start of the Kim Jong-un regime, and higher than the 14,000 tons imported during the first eight months of this year total, the broadcaster said.

Experts opined that the step is designed to stabilize rice prices at a time when the stock has hit its bottom, the broadcaster said.

“This is the time when the harvest is around the corner, and the stock is nearly exhausted,” Kwon said.

Full article:
N. Korea imports rice on large scale in Sept.
Yonhap News
2016-11-03

Discussions such as these are always complicated by the fact that for most regions, private market supply is probably far more important than whatever the PDS supplies.

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The problem with the Red Cross narrative of North Korea’s floods

Wednesday, October 5th, 2016

By Benjamin Katzeff Silberstein

I had originally intended to use this post solely to encourage readers to check out this story by the International Federation of Red Cross and Red Crescent Societies Asia Pacific. But as I was reading through the story, I realized there are several issues with it that need to be pointed out. It offers a comprehensive narrative of this year’s flooding in northern North Korea, which has devastated parts of North Hamgyong province. The photographs add a crucial human dimension to the ghastly figures for the damage. But unfortunately, the IFRC casts blame in all the wrong directions and fails to point out the core of the problem.

First, the key passages of the piece:

On August 29 the rains began. They continued for the next two days, swelling the Tumen river as it coursed along the northeast border of the Democratic People’s Republic of Korea (DPRK).  The heavy downpour was a consequence of the tail end of Typhoon Lionrock which had collided with a low pressure weather front as it tracked across China.  In just 24 hours up to 300 mm of rain fell over parts of DPRK’s North Hamgyong Province.

Streams of water flowed down barren mountains. They merged in ravines to become raging torrents of water – flash floods – which carved through rural communities in the valleys below, demolishing everything in their path.  The River Tumen also burst its banks, swallowing entire settlements in the dead of night.

The floods are considered to be the worst in decades yet this has been a silent disaster, largely unnoticed outside DPRK.  Hundreds of lives have been lost and the scale of devastation has been immense.

Now, one month on, the full extent of what happened is still emerging. According to the government some 30,000 homes have been damaged, submerged or completely destroyed and 70,000 people rendered homeless.

[…]

For days villages across Musan and Yonson Counties remained cut off as thousands of rescuers were mobilised to the area to repair roads and bridges and remove the earth and rocks deposited by landslides.

In the Sambong Bo area of Musan County,  the water level of the River Tumen had risen by over four metres in a matter of hours. When it broke its banks 500 homes were swept away.  At least 20 other communities further along the river suffered the same fate. It is still not clear how many died.

Reaching the flood-affected area requires a three-day drive from the capital Pyongyang but it only took 24 hours for the DPRK Red Cross to mobilize over 1,000 of its volunteers from the area to respond to the disaster. They supported local authorities in search and rescue efforts and also provided first aid services to the injured. Trained disaster response teams were deployed and within days emergency relief supplies for 28,000 people had been released from the Red Cross regional disaster preparedness stocks which were stored in warehouses in South Hamgyong and Pyongyang.

Items such as tarpaulins, tents and tools to make emergency shelters were distributed to flood-affected families. People also received other essentials such as warm bedding, kitchen sets, water containers and toiletries.

[…]

But there are other vulnerabilities. According to the UN, North Hamgyong Province has some of the highest levels of stunting and wasting among under five children. The Public Distribution System, upon which 78 per cent of the population of the province relies, is well below target levels (300 grams compared to the target of 573 grams) and not sufficiently diverse to cover nutritional requirements.

The floods damaged over 27,000 hectares of arable land. The rice and corn were ready to be harvested but now, many families’ food has been washed away along with crops, livestock and food gardens.

To make matters worse, more than 45 health clinics have been damaged by floodwaters and there is a critical shortage of basic equipment and essential medicines. Water supply to 600,000 people across the province has been disrupted and for clean water, some communities are now dependent on a few hand pumps and dug wells, which are most likely contaminated by the floods.

On 21 September, the IFRC launched a 15.2 million Swiss Francs emergency appeal (USD 15.5 million, Euros 13.9 million) to reach more than 330,000 people affected by the floods.

The appeal aims to provide a variety of emergency assistance over the next 12 months. Emergency water supply will be installed and teams will be mobilised to avert communicable diseases by improving sanitation and promoting good hygiene. Medical supplies will be provided for health teams on the ground and technical support provided to help with the reconstruction of permanent homes.

The appeal will also be used to purchase winterization kits that will help thousands of families through the hardship of the coming months. These include supplies of coal for heating and cooking, toiletries, winter clothes and quilts, basic food stocks and water purification tablets.

But according to Chris Staines international help needs to scale up.

“This is a disaster on a scale that that no-one seems to have acknowledged. When you add up all the threats that people are facing today in DPRK there is a very real risk of a secondary disaster unfolding in the months ahead if we don’t get the help that is needed immediately”.

Full article here:
Suffering in Silence
IFRC Asia
Shorthand Social
2016-09-29

Undoubtedly, this is a tragedy on a scale that is difficult to fathom even with the accompanying pictures of some of the devastation. Readers who wish to donate to the IFRC disaster relief efforts can do so here.

But the narrative lacks a crucial component, namely the government’s responsibility in disaster management and prevention, and the connection between the economic system and North Korea’s recurring floods. Now, readers familiar with the North Korean NGO context will be well aware that this is a sensitive political topic that NGOs and aid organizations are often reluctant to discuss, for good reasons. They depend on maintaining good relations with the North Korean government in order to continue operating in the country, and these relations are sensitive at best.

That said, the way in which the IFRC narrative seems to fault only one party — the international community, for not giving the disaster more attention — is strange, to say the least. For it is not the international community that has created the systemic deficiencies that contribute to making floods a yearly recurring phenomenon. Rain clouds do not gather only over North Korea. Anyone who has spent late summer and fall in South Korea will be familiar with the torrential rains that sweep across the country on the same regular basis that they hit North Korea. And yet, we never hear about human suffering and disasters in South Korea on an even comparable level with those that hit North Korea. Some landslides tend to happen, and sometimes the rains even claim lives. But they do not paralyze whole regions of the country and they do not cause humanitarian disasters on the southern side of the border.

The reasons that North Korea is hit with such particularly great damage from the rains, year after year, largely stem from its economic system. To name only a couple of examples: trees have been felled en masse due to a lack of fuel, causing erosion as not enough trees are left to suck up the rainwater, and the population has had to resort to clearing hills from trees to generate more farmland, particularly during the “Arduous March” of the 1990s. Moreover, in command economies, quotas for both wood and food need to be filled no matter what methods have to be employed — I am unable to find a source for the historical evolution of tree felling in North Korea prior to the 1990s, but most likely, such a logic has also contributed to the barren hillsides around the country. To be fair, Kim Jong-un has focused a great deal of attention on reforestation, which is arguably one of the most important but least noted policy focuses during his tenure. But thus far, not much seems to have happened in practice.

Barren and eroded hillsides in Namyang, North Hamgyong Province, as seen from Tumen City in China, June 2016. On the Chinese side, the equivalent hills are covered with trees. Photograph by Benjamin Katzeff Silberstein

Barren and eroded hillsides in Namyang, North Hamgyong Province, as seen from Tumen City in China, June 2016. On the Chinese side, the equivalent hills are covered with trees. Photograph by Benjamin Katzeff Silberstein

So: on the one hand, the IFRC may well be right that coverage of North Korea’s humanitarian disaster should render more media coverage. But on the other hand the late summer floods are such a regular occurrence that they should hardly count as news anymore. NGOs and aid organizations need to air on the side of political caution in their dealings with the North Korean regime, but their failure to call out the government for not rectifying the problems causing the damage in the first place may well be doing more harm than good in the long run.

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Posted in Agriculture, Forestry, International/Korean Red Cross | Comments Closed

North Korean food prices after the floods

Wednesday, September 28th, 2016

By Benjamin Katzeff Silberstein

A recent report by Radio Free Asia/Asia Press (and recapped below by Yonhap) claimed that food prices had doubled in northern North Korea as a result of the floods last month:

Food prices in North Korea’s northeastern region, which has been hit by devastating floods, have doubled due to the slow pace of recovery and poor distribution networks, U.S.-based media Radio Free Asia (RFA) reported Thursday.

Citing a report by Japanese media outlet Asia Press, the RFA said the country’s northern cities of Hoeryong and Namyang are experiencing a spike in rice and corn prices which soared to 8,000 won (US$7.24) and 2,000 won per kilogram, respectively, from 4,300 won and 1,000 won before the worst-ever floods in decades. The flooding caused severe property damage with many people being reported dead or missing.

The Japanese media said there is a likelihood that other commodity prices will likely soar following rice.

Jiro Ishimaru, who heads the Osaka office of Japan’s Asia Press, told the RFA that rice prices rose rapidly as the transportation situation in the flood-damaged area is very serious, with the railroads and overland routes being almost blocked. The official said the lack of transportation means is leading to poor distribution of food and commodities.

Ishimaru, in addition, warned that water shortage and sanitary problems will also follow due to a shortage of personnel equipment needed to speed up recovery.

Full article here:
Food prices in N. Korea’s flood damaged area doubles: report
Yonhap News
2016-09-22

According to DailyNK, the government has therefore started implementing price controls to keep the market prices for food from skyrocketing:

북한 당국이 ‘60년 만의 대재앙’ 수해 피해를 입은 함경북도 지역의 물가 안정을 위해 총력을 기울이고 있는 것으로 전해졌다. 인민보안성(경찰) 인력을 동원해 쌀 사재기와 가격 인상을 통제하면서 내부 안정화를 꾀하고 있다고 소식통이 알려왔다.

함경북도 소식통은 27일 데일리NK와의 통화에서 “현재 쌀 가격 등이 큰물 피해 이전과 거의 차이가 없다”면서 “보안원과 순찰대가 출동해서 쌀 사재기 및 가격을 올리는 행위 등을 강력하게 막았다”고 전했다.

소식통은 이어 “(수해가 일어나고 얼마 되지 않아) 어떤 장사꾼은 1킬로(kg)에 5000원, 5300원하던 쌀을 8000원에 팔려고 하기도 했다”면서 “하지만 보안원들의 통제 때문에 눈치만 보다가 그렇게 하지 못했다”고 설명했다.

그러면서 소식통은 “회령시의 경우 한때는 쌀 가격이 6000원까지 폭등하기는 했으나 지금은 5000원 대로 하락했다”면서 “돼지고기 가격도 1kg에 13000원 등 원래 가격과 같다. 물가가 전반적으로 차분하다(안정돼 있다)”고 덧붙였다.

Full article:
North Korea making efforts for price stability in flood damaged areas…”Don’t raise rice prices”
Kang Mi-jin
Daily NK
2016-09-29

Yonhap offers a summary of the article in English:

North Korea is going all out in blocking the cornering and the skyrocketing of rice prices in its flood-devastated northeastern areas, a Seoul-based news outlet specializing in the North reported Wednesday.

This summer, six areas in North Hamkyong Province in the North were devastated by heavy rains accompanied by Typhoon Lionrock, with the United Nations having estimated that 138 North Koreans were killed and 400 others are missing by the floods, with about 20,000 houses destroyed.

“Security agents and patrolmen are strongly cracking down on activities of cornering rice and raising rice prices (in flooded areas),” the Daily NK quoted a source from the North’s North Hamkyong Province as saying.

Therefore, there’s no big difference in rice price before and after the worst-ever flood hit the region, the source said.

“A merchant was trying to sell 1 kilogram of rice at 8,000 won shortly after heavy rains flooded the area, but was unable to do so due to strict control by security agents,” the source said.

Rice price once soared to 6,000 won from 5,000 won per kilogram before the floods, and now remains at the 5,000 won level, according to the source, adding that pork prices also showed no noticeable change, selling at 13,000 won per kilogram as before.

“Prices in the deluged areas are stable, in general,” the source said.

Full article:
N.K. strongly controls prices in flood-stricken areas
Yonhap News
2016-09-28

Several things are worth noting here. First, historically, it is common for food prices to rise as a result of seasonal flooding in North Korea. After the severe floods in 2012, rice prices shot up from 4866 won/kg in July to 6533 won/kg in late September. Second, the rise in prices reported by RFA/Asia Press might have been a temporary shock. The DailyNK price graph, last updated in early September, shows very moderate increases in prices after the floods hit in late August. Perhaps prices stabilized quickly as supply did (i.e., deliveries coming in from other areas; this is only speculative though). Third, price controls are difficult to maintain under pressure. Had there been a massive pressure for prices to go up due to drastically decreased supply, it is hard to see that the government would have been able to effectively keep market prices at a certain level across the board. I will try to keep this post continuously updated as market price information gets updated.

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(Updated) Severe flooding in northeastern North Korea: pictures (summer 2016 floods)

Friday, September 2nd, 2016

By Benjamin Katzeff Silberstein

Larger-than-usual seasonal rains has caused flooding in several cities along the Sino-Korean border. Emergency evacuations have been issued in Tumen and Hunchun on the Chinese side. On the North Korean side, Namyang, a small town in Onsong county, has been struck by unusual flooding. DailyNK explains:

Flooding in North Korea typically occurs near the West Sea, not near Namyang, which is located in Onsong County, North Hamgyong Province. In areas like Sinuiju, downpours during the rainy season coupled with high tide in the West Sea are known to drive up the water levels of Amnok (Yalu) River and lead to flooding; however, such an occurrence is rare in areas adjacent to the Tumen River, particularly in the hillside city of Namyang.

As is usually the case in North Korea, flooding impacts are exacerbated by environmental factors related to the economy and food production:

It is therefore believed that unusually heavy rain, which battered the greater northeast region, contributed to the flooding, and was likely exacerbated by the use of embankments as small plots to grow produce by local residents, whose livelihoods depend on doing so. Weeding and digging around this area in order to plant beans and other crops is thought to have compromised the strength of the river banks, yet no preventative measures were put forth by the authorities.

DailyNK has a few pictures of Namyang taken from the Chinese side, showing flooding and destruction.

Full article in DailyNK:
Severe flooding sweeps across Namyang
Kim Ga Young
DailyNK
2016-09-02

For reference and comparison, the following pictures I took earlier this summer show Namyang in ordinary times (click for larger pictures):

Namyang1

Namyang city, Onsong county. Photo: Benjamin Katzeff Silberstein

Namyang2

Namyang city, Onsong county. Photo: Benjamin Katzeff Silberstein.

Namyang, Onsong county. You can see the train station to the right in the picture. Photo: Benjamin Katzeff Silberstein.

Namyang, Onsong county. You can see the train station to the right in the picture. Photo: Benjamin Katzeff Silberstein.

 

 

 

 

 

 

 

Namyang4

Namyang city, Onsong county. Photo: Benjamin Katzeff Silberstein.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Update 2016-09-04): At least ten people have died in North Hamgyong province as a result of the floods, Voice of America reports (in Korean):

국제적십자사 IFRC가 큰물 피해를 입은 함경북도 지역에 긴급구조팀을 파견해 구조활동을 펼치고 있다고 유엔이 밝혔습니다.

타판 미슈라 주 북한 유엔 상주 조정자 겸 유엔개발계획(UNDP) 상주대표는3일 북한 내 유엔 기구들과 비정부기구 관계자들에게 보낸 이메일에서, 태풍으로 인한 북한 홍수 피해가 예상보다 훨씬 심각한 것으로 파악되고 있다며 이같이 밝혔습니다.

‘VOA’가 3일 단독으로 입수한 이 이메일에 따르면 이번 폭우로 함경북도 지역이 가장 큰 피해를 입었으며, 특히 회령시과 문산군, 연사군, 청진시, 김책시, 경송군, 길주군, 라선시 일대에 큰 피해가 발생했습니다. Summary in English (by NKEconwatch): according to Tapan Misura, UNDP country representative in North Korea, North Hamgyong province has been struck by flooding in the past few days, to a much worse degree than expected. Especially Hoeryong, Musan, Yeonsan, Chongjin, Kimchaek, Kyeongseong, Kilju and Rason have taken strong hits.

또 홍수로 10여 명이 사망하고 1만 여 가구가 피해를 입었으며, 6천7백여 가구가 파괴되고 7천가구가 파손된 것으로 알려졌다고 미슈라 상주대표는 밝혔습니다. Summary in English: As a result of the flooding, ten people have died, about 10,000 homes have been damaged, 6,700 homes have been destroyed and another 7,000 homes have been broken/damaged.

[…]

특히 함경북도 회령시의 피해가 심해 가옥 2천개 이상이 물에 잠기고 1천개 이상의 집이 완전히 파괴됐다고 밝혔습니다. 또 적어도 2만6천여 가구가 식수도 없이 고립된 상황이라고 밝혔습니다. Summary in English: destruction has been particularly heavy in Hoeryong in North Hamgyong, where 2,000 houses have been submerged in water, and over 1,000 houses have been completely destroyed. Moreover, at least 26,000 households now lack access to drinking water.

미슈라 상주대표는 함경북도 일대에 지금도 계속 비가 내리고 있고 앞으로 며칠 간 비가 예보돼 있어 피해가 더 늘어날 것으로 보인다고 말했습니다. Summary in English: According to Misura, rain is continuing to fall in North Hamgyong, and will do so over the next few days, so the destruction is expected to grow.

Full article here:
유엔 ‘북한 함경북도 등 홍수로 큰 피해…10여명 사망’
Kim Hyeon-jin
Voice of America
2016-09-04

Korean Central News Agency reports some estimated figures on the destruction:

It rained heavily with strong wind in North Hamgyong Province and other parts of the DPRK from August 29 to September 2, affected by a combination of typhoon-10 and low pressure field formed in the northwest.
According to data available at the State Hydro-meteorological Administration, the rainfall reached 320 mm and 290 mm in Kyonghung and Puryong counties of North Hamgyong Province from 00:00 Monday to 12:00 Friday.
And over 150 mm of rain fell in Onsong, Kyongsong, Kyongwon, Yonsa and Hwadae counties of the province as well as some parts of Ryanggang Province including Taehongdan County.
The River Tuman flooded some areas of Hoeryong and Rason cities, Musan, Onsong, Kyongwon, Kyonghung and Yonsa counties, causing big damage.
Especially, flood heavily hit Hoeryong City, Musan and Yonsa counties, claiming 15 people missing in Hoeryong.
17 180 houses were partially or completely destroyed with at least 44 000 people homeless in North Hamgyong Province.
Damage investigation goes on there.
And a campaign to help victims and heal the damage is being conducted in the flood-stricken areas.

Full article:
North Hamgyong Province of DPRK Suffered from Flood Damage
Korean Central News Agency
2016-09-03

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Pyongyang under UN Sanctions

Tuesday, August 30th, 2016

Institute for Far Eastern Studies (IFES)

There has been much interest in Kyodo’s (a Japanese wire service) reports on the atmosphere in Pyongyang following the imposition of sanctions on North Korea back in March by the UN Security Council. According to Kyodo’s ‘current report’ on the subject from August 21, ‘200 Day Speed Battles’ and ‘Mallima Speed Creation’ slogans can be seen in many of Pyongyang’s streets.

While surprisingly Pyongyang appears unchanged following UN sanctions, the entire nation is subject to a general labor mobilization. The 200 day speed battle began in June and aims to raise food production. Mallima Speed Creation is a slogan created to inspire workers to engage in productive activities at the same speed as a horse that can cover 10,000 li (around 3,927 km) in a day.

Construction of the frame for a 70-storey apartment block on Ryomyong Street, which began after the announcement that the block would henceforth be a site to house educators, has almost been completed. There are large tour groups to be seen at the Nature Museum and Central Zoo (the construction of both was completed last month). The Nature Museum, with its models of dinosaurs and taxidermied animals, is particularly popular, with a member of staff reportedly saying “there is a daily limit of 6,000 on the number of visitors admitted, and we have to turn people away every day.”

The Mirae Shop, a department store refurbished and reopened in April, has a tidy display of imported cosmetics and electrical appliances, but is largely devoid of visitors. A member of staff explained that “because people are busy with the 200 day speed battle, there are not many customers.” The Kyodo report thus argues that the effect of sanctions on Pyongyang is as yet limited.

The Kyodo report also includes an interview with Kim Cheol (43), the head of the Economic Research Centre in North Korea’s Academy of Social Sciences. In the interview, Kim Cheol asserts that “the North has hewed to a line of constructing a self-sufficient economy, and therefore the [UN and other] sanctions have very little impact.” Kim offered an optimistic vision: “struggles to increase the proportion of facilities and raw materials sourced domestically continue. . . . With or without sanctions, with our energy and technology we shall construct an economy with a high degree of self-sufficiency.”

With respect to last year’s food production figures, he said that “though they have not been released, the price of rice remains the same as last year, while other cereals are around 65~70% the price they were last year. . . . Given price fluctuations, it is estimated that food production has increased.”

Regarding the supply of and demand for electricity, he stated that “while we cannot fully satisfy demand, the development and introduction of coal additives in coal-fired power stations has dramatically increased production. . . . Many hydroelectric power stations making use of rich hydropower resources have been constructed.” Hence it can be inferred that while electricity supplies remain insufficient, they continue to increase.

Moreover, with respect to effect of coal export bans, Kim said that “the development of the economy is on an upward trajectory, so actually coal resources are needed more inside the country. . . . Improvements are aimed at raising the proportion of domestic production [in all areas] thus raising the proportion of resources used within the country.” At the same time though, he acknowledged that “because of a reliance on imported oil products like kerosene and airplane fuel, there certainly has been some impact.”

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Posted in Agriculture, Food, International trade, UN Security Council | Comments Closed

Is North Korea’s food situation really getting worse? The markets don’t think so.

Friday, July 22nd, 2016

By Benjamin Katzeff Silberstein

Since early 2016, the Food and Agriculture Organization of the UN (FAO) has been sounding the alarm bells on North Korea’s food situation. In an interview a few weeks ago with Voice of America’s Korean-language edition, FAO-official Christina Cosiet said that this years’ harvest would be the worst one in four years. One question, dealt with before by this blog, is how bad this really is. After all, the past few years seem to have been abnormally good in a long-run perspective.

But another obvious question is: why do market prices in North Korea tell the opposite story about food supply?

Prices for both rice and foreign currency (US-dollars) have remained remarkably stable for a situation where people should be expecting a worse-than-usual harvest. It is important to bear in mind that prices are largely seasonal and tend to increase in September and October. But unless prices somehow skyrocket in a couple of months, things do not look that bad.

There seem to be two possibilities here: either official production and food supply through the public distribution system simply does not matter that much, because shortages are easily offset by private production and/or imports. Or, the FAO projections simply do not capture North Korean food production as a whole.

For an overview of food prices in the last few years, consider the following graph (click here for larger version):

graph1

Graph 1: Prices for rice and foreign currency, in North Korean won. Prices are expressed in averages of local prices in Pyongyang, Sinuiju and Hyesan. Data source: DailyNK market prices.

As this graph shows, both the exchange rate and rice prices have remained relatively stabile over the past few years. Thus far, this summer has been no exception. The following graph shows exchange rates and rice prices from the spring of 2015 till July 2016 (click here for larger version):

graph2

Graph 2: Prices for rice and foreign currency, April 2015–July 2016, in North Korean won. Prices are expressed in averages of local prices in Pyongyang, Sinuiju and Hyesan. Data source: DailyNK market prices. 

This does not look like the behavior of a nervous market where supply is declining at a drastic rate. Of course, a number of caveats are in order: again, prices are likely to rise through September and October, as they have in the past. Moreover, markets may react to any harvest declines at a later point in time, as they become more apparent.

Even so, it seems inconceivable that market prices would remain so stable if North Korea was experiencing a steep dive in food production. After all, farmers would be able to see signs fairly early on, and their information would presumably spread through the market as a whole. In short, it is logically unthinkable that markets simply would not react to an unusually poor harvest.

This all begs the question of how much market prices tend to correlate with the FAO:s harvest figures overall. The short answer appears to be: not much. The graph below (click here for larger version) shows the average prices for rice and foreign exchange per year on the North Korean market since 2011, and harvest figures drawn from reports by the FAO and the World Food Program (WFP). (See the end of this post for a more detailed explanation of the underlying calculations.)*

graph3

Graph 3: Yearly average market prices for rice and US-dollar (in North Korean won), and FAO food production figures. Data source: DailyNK market prices. 

As this graph shows, there is generally fairly little correlation between market prices and harvests as calculated by the FAO. Harvests climbed between 2009 and 2015, while market prices climbed and and flattened out from 2012, around the time of Kim Jong-il’s death. Exchange rates and rice prices unsurprisingly move in tandem, but appear little impacted by production figures as reported by the FAO.

It is possible that prices react in a delayed manner to harvests, and that the price stabilization on the market is a result of increased harvests over time. But the consistent trend over several years, with prices going up as harvest figures do, is an unlikely one. Again, it is also difficult to imagine market prices not reacting relatively quickly to noticeable decreases in food production.

So what does all this mean?

It is difficult to draw any certain conclusions. But at the very least, these numbers suggest that the FAO food production projections are not telling the full story about overall food supply in North Korea. Moreover, market signals are telling us that food supply right now is far from as bad as the FAO’s latest claims of lowered production would have it. Rather, prices seem normal and even slightly more stabile than in some previous years with better harvests. In short, the narrative that this year’s harvest is exceptionally poor seems an unlikely one.

 

*A note on graph 3:

 For market prices per year, I calculated an average price from all observations in a given year. The DailyNK price data is reported for three cities separately: Pyongyang, Sinuiju and Hyesan. I have used an average of these three cities for each data observation as the base for calculating yearly averages. This is a somewhat tricky way of measuring, as the amount of data observations, as well as their timing, sometimes varies from year to year. The steep decline in 2009–2010 is primarily caused by the currency denomination, and should not be taken for a real increase in supply.

The FAO food production figures are not reported by calendar year, but published in the fall and projected for the following year. Since these figures best indicate available supply for the year after they are reported, I have assigned them to the year following the reporting year. That is, the figure for 2014 comes from the WFP-estimate for 2013/2014, and so on and so forth.

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Posted in 6.28 Policy on Agriculture (June 28), Agriculture, Black markets, Economic reform, Food, General markets (FMR: Farmers Market), Price liberalization, UN, UN Food and Agriculture Organization, UN World Food Program | Comments Closed

North Korea summer 2016 food shortage reports

Sunday, June 19th, 2016

By Benjamin Katzeff Silberstein

‘Tis the season of news reports of food shortages in North Korea. Late spring and summer is the “lean season” for food in the country, when shortages tend to become more dire as the main harvest season approaches. In an interview with Radio Free Asia, the FAO-official Christina Coslet repeated the organization’s prediction of the harvest this year being the smallest since 2011. Moreover, PDS-distribution is reportedly down to 360 grams, the lowest since 2010 (click here for a recap in English by Korea Times):

기자) 코슬렛 담당관님, 우선 북한 식량 사정에 대해 살펴보죠. 요즘 북한의 식량 사정 어떻게 평가하고 있습니까?

코슬렛 담당관) “ The food security situation due to the decreased production is expected to worsen compared to the previous years….”

지난 몇 년 간 보다 훨씬 안 좋을 것으로 보고 있습니다. 아시다시피 지난해 가을 추수한 주요 곡물의 수확량이 크게 감소했습니다. 쌀의 경우 전년도에 비해 26% 감소했고, 옥수수도 3%가량 감소했죠. 북한이 올해 외부 지원이나 수입으로 충당해야 할 식량 부족량이 69만4천t에 이르는데요, 이 같은 식량 부족분 규모는 2011년 이래 최대 규모입니다. 하지만 현재 확보한 식량은 부족 분의 3% 가량인 2만3천t에 그치고 있습니다. [Summary: rice harvests are down by 26%, corn by 3%, the import need is the greatest since 2011 /BKS.]

[…]

기자) 북한 당국의 식량 배급량을 통해서도 북한의 식량 사정을 가늠할 수 있지 않나요?

코슬렛 담당관) “Yes, it is also another way to see the food shortage situation in the country…”

그렇습니다. 식량이 적게 배분됐다는 것은 그만큼 식량 사정이 좋지 않다는 걸 의미하죠. 올해 1월부터 3월까지 북한 당국이 주민 한 명 당 하루 배급한 양은 370g입니다. 하지만 4월부터 6월 배급량은 360g으로 줄었는데요 이는 지난 2010년 이래 가장 적은 양입니다. 그만큼 식량 사정이 좋지 않다고 볼 수 있죠. [Summary: PDS distribution was 370 grams per day between January and March this year, but went down to 360 grams between April and June /BKS.]

Full article:
FAO: Food shortages in North Korea largest in four years
Kim Hyun-jin
Radio Free Asia
2016-06-19

Of course, given the way that the North Korean economy functions today, one might question how much PDS-distributions really matter. There is quite a bit of regional variation in dependency on the PDS, and whatever the actual state of food supply, different localities will be hit differently whenever food supply is lacking.

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Posted in Agriculture, Agriculture statistics, Food, Foreign aid statistics, Statistics | Comments Closed

DPRK food rations at 60% of UN recommendation

Thursday, June 16th, 2016

According to Yonhap:

North Korea has been providing just 360 grams of daily food rations to each of its citizens in the second quarter of this year, far below the United Nations’ recommendation, a media report said Thursday.

Citing the report by the U.N. Food and Agriculture Organization (FAO), the U.S.-based media Voice of America (VOA) said the daily ration is 12 percent less than last year during the same period which was 410 grams, and 10 grams less than the previous quarter’s 370 grams.

This is far less than the U.N.’s recommendation of 600 grams as well as the North Korean government’s target of 573 grams.

According to the FAO’s recent report on the North’s food supply and demand for the grain in 2015-2016, the country’s grain production in 2015 was 5.42 million tons, a 9 percent decrease from the previous year.

The report said North Korea’s rice harvest dropped 26 percent to 1.95 million tons last year from a year earlier, while its corn harvest contracted 3 percent to 2.3 million tons during the same period.

FAO said that North Korea’s food shortage this year will be 694,000 tons which has to be filled either by external assistance or by imports from other countries.

This is the isolated country’s worst food shortage since 2011. If North Korea manages to import some 300,000 tons of food this year, it will still face a shortage of 394,000 tons, VOA said.

Read the full story here:
N. Korea’s food rations remain at 60 pct of U.N. recommendation: report
Yonhap
2016-6-16

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Posted in Agriculture, Food, Public Distribiution System (PDS), UN Food and Agriculture Organization | Comments Closed

Domestic food price dip in North Korea

Sunday, June 12th, 2016

By Benjamin Katzeff Silberstein

North Korea’s domestic market prices have been behaving somewhat counterintuitively as of late. Harvest declined last year (or at least so the FAO claimed), and given the latest round of sanctions, it wouldn’t have been unreasonable to expect some hoarding and anxiety on the markets, out of anticipation that China may come to control cross-border trade and smuggling more tightly.

Not so, Daily NK reports:

Despite the lean season, referred to domestically as the “barley hump,” during which grains typically get pricier in North Korea, prices are instead on a downward trend, Daily NK has learned.

Daily NK’s sources within the country believe relaxed restrictions on marketplace activity under the Kim Jong Un regime has helped create a balance in the supply and demand of food by way of imports, narrowing the range of price swings even when the local supply dips during the “barley hump.”

“People were quite worried about the economic sanctions from China but are now relieved to see that rice prices have not changed much,” a source in Ryanggang Province told Daily NK, She reported that in her region, rice, which had been selling at 5,000 KPW (a kilogram) until just a few days ago, had dropped to 4,500 KPW; corn, which fetched 1,200 KPW, slid to 1,000 KPW; and pork prices fell about 1,000 KPW to 11,100 KPW.

“More vendors now import rice, corn, etc. from China, so there’s more than enough to go around even after making up for the shortfall in local supply during the barely hump,” she added, explaining that the dip in rice prices is in large part due to the upcoming harvest of early potatoes and barley, as vendors look to offload their supplies.

Overall, it appears, judging from the stability of market prices, that both formal and informal market mechanisms in North Korea function well enough to make up for shortfalls in production.

Full article:
Dip in prices help residents surmount ‘barley hump’ 
Kang Mi Jin
Daily NK
2016-06-12

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Posted in Agriculture, Economic reform, International trade, Political economy, Statistics | Comments Closed

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