RESEARCH INSTITUTE FOR NORTH KOREAN SOCIETY | http://www.goodfriends.or.kr/eng | email: [email protected] No. 175 July 2008 Heungnam South Hamgyong North Korea Haeju South Hwanghae <Image by Google earth> National Rice Prices Steady at 2,500~2,700 won per kg Without Regional Variations. Rice prices, which had gone all the way up to 4,000 won per kg in regions around North and South Hwanghae Provinces in late May, have been going down steadily since then and are now around 2,500 won per kg nationwide without too many regional variations. The rice prices were so unstable in late May that they would be different in the morning and evening of the same day. But they have been stabilizing throughout June and are now stable across the board in July. If you compare the prices of staple grains in major markets throughout the nation, rice’s prices are at 2,500~2,700 won and corn prices are 1,300~1,500 won without any overt regional variations. One of the reasons for the stabilization of grain prices was the psychological comfort that news of food imports from the United States and elsewhere had on the markets. Also, smuggling of food and small-scale imports from China have been coming in steadily since last month. External aid included 3,000 tons of flour from Russia and 37,000 tons of food from the U.S., as the 1st shipment of the promised 500,000 tons. As such, the grain prices are predicted to remain at a high but stable level, with the expectations that food from external sources will continue to come in. Table 1. Price of Grains in the Major Cities in End of July, 2008 (Units: North Korean won/kg) Chungjin Sinuiju Hamheung Pyongyang Wonsan Pyongsung Rice 2,500 2,600 2,700 2,500 2,600 2,600 Maize 1,300 1,350 1,500 1,300 1,400 1,400 NK won /kg Price Grains in the Major Cities in End of July, 2008 Chungjin Sinuiju Hamheung Pyongang Wonsan Pyongsung Rice Maize Grain Prices Are Still 3 Times Last Year’s – Out Of Reach for Most People NK won /kg Price trend of Rice in Chungjin, 2007-2008 2,500 won in July 15. Estimated Price based on usual price NK won /kg Price trend of Rice in Hamheung, 2007-2008 2,700 won in July 15. Estimated Price based on usual price NK won /kg Price trend of Maize in Chungjin, 2007-2008 1,300 won in July 15. Estimated Price based on usual price NK won /kg Price trend of Maize in Hamheung, 2007-2008 1,500 won in July 15. Estimated Price based on usual price As you can see from the grain prices charts above, rice prices, which had “gone insane” at one time, have now stabilized at a high but stable range, albeit 3 times the level of last year. However, for everyday people, the prices are still too high and make buying the grains out of reach. It is like a picture of a delicious cake, appetizing but not real. When comparing today’s grain prices in Chungjin and Hamheung City to last year’s, it is easy to see how more expensive today’s prices are. Last year, both Chungjin and Hamheung’s rice and corn prices were 900 and 300 won, respectively; in 2008, the rice prices are now 2,500~2,700 won, about three times last year’s prices. Of course, the prices have come down greatly from the high of 3,800 won in May. However, they are still prohibitely high compared to last year’s. The stabilization of grain prices is the result of the influx of food from external aid sources. This is good for those people with money enough to buy food in markets. But for those without money, approximately half of the population, the food prices are still too high for them to afford it. Kangwon Province Suffering The Most from Current Food Shortages According to one official, as far as the central party is aware, Kangwon Province is suffering the most from the food shortages, followed by Jagang Province. He said that the worst hit provinces were North and South Hwanghae up to May and June. However, since double cropping is possible in Hwanghae provinces, they were able to get a spotty harvest of barley, wheat, potatoes, and other crops to relieve a portion of the population from relying entirely on grass porridges for their food. Although it is still not enough to completely stop people from starving to death, there is definitely fewer people dying from hunger than before. In comparison, mountainous terrain of Kangwon and Jagang provinces cannot support farming as well and, accordingly, continue to suffer acutely from food shortages. If they were to put the provinces in the order of suffering from the food shortage, from worst hit to least, it would be Kangwon, Jagang, South Hamgyung, Ryanggang, South Hwanghae, North Hwanghae, South Pyongan, North Hamgyung, and North Pyongan province. Kangwon to South Pyongan provinces are seeing people who have actually starved to death; North Hamgyung and North Pyongan have not suffered any famine victims but are seeing people dying of indirect causes such as malnutrition and other hunger related diseases. Severity of Food Shortage Crisis in North Korea, July 2008 High Rasun Direct Control City North Hamgyong Low Ryanggang Jagang Sinuiju South Specialized Hamgyong District North Pyongan South Pyongyang Direct Pyongan Control City North and South Kumkangsan Hwanghae Tour District Because of new Kangwon crops, the food North Kangwon Province situation is improving, Hwanghae even though these South Because of two years regions were the worst big flood and shortage of hit until June. Hwanghae farming fields, the food problem is getting worse after June. The Heungnam Fertilizer Factory Is the Most Productive In This Year The Heungnam Fertilizer Factory of South Hamgyong Province has managed to produce a record amount in order to meet the fertilizer demand of the entirety of North Korea. To increase productivity, officials of the Central Government and executives of the Ministry have already visited the factory several times this year and emphasized the importance of producing fertilizer. An official of the Central Government said, “Because South Korea did not send us any fertilizer this year, the government ordered the manager of the Heungnam Fertilizer Factory and the secretary of the Province Party to produce the necessary fertilizer for this year without any conditions. It also sent workers of the factory a letter of encouragement.” According to the 3rd 7-year plan, the Heungnam Fertilizer Factory has rebuilt its entire facility. Despite the extensive construction, shoddy building has resulted in little change in productivity. However, the factory has made every possible effort to refit machinery for this year, resulting in an increase in efficiency in 2008. The Heungnam Fertilizer Factory thoroughly supervises the loss of fertilizer as well as increases its productivity. To insure that no one steals fertilizer, the factory has police officers and security guards at the front and rear gates, even going to far as to search workers’ homes to take back any stolen product. However, when farmers receive the nitrogenous fertilizer made by the Heungnam Fertilizer Factory, they do not seem to be happy and satisfied. They know that this fertilizer is low quality, meaning that it will be difficult to increase their crop yield. While many farmers are disappointed, those who did not even receive the poor-quality product from Heungnam are still envious of those who have something to spread on their fields. Nitrogenous Fertilizer Arrives in Haeju City for the First Time This Year On July 2, nitrogenous fertilizer produced by the Heungnam Fertilizer Factory of South Hamgyong Province arrived at Haeju station, South Hwanghae Province for the first time this year. Farms around Haeju City need the fertilizer, but have been unable to receive any due to a lack of diesel oil and thus no means of transportation. The City Party held an urgent meeting and the secretary in charge gave the managers of factories and enterprises and the party secretaries instructions that the companies should deliver the fertilizers to the farms. In fact, the supply office for farming materials has already distributed diesel oil to deliver fertilizer for this year, but each farm sold the oil in order to buy food for their workers. Heungnam Fertilizer Distributed to Each District of North Hamgyong Province Since July 9, Heungnam nitrogenous fertilizer produced by the Heungnam Fertilizer Factory has been distributed to each city and county of North Hamgyong Province. According to the order of the City Party, each district police station sent a representative along with two officers pick up the fertilizer. It is understood that the purpose of including the officers as guards is to prevent fertilizer from being stolen during delivery. [Opinion] Despite Some Signals of Change, North Korea's Food Situation Is Still Gloomy While North Korea's food shortage has deteriorated since last spring, there have been some signals of positive changes since July 2008. First, food prices have shifted. Food prices that had begun to soar in the end of March peaked in late May, started to drop in mid June, and became stable in mid July. U.S. food aid is flowing into North Korea and assistance from the outside world is gradually increasing as well. In addition, a small amount of food smuggling is taking place in national border areas. These external factors seem to contribute to stabilizing food prices in North Korea.