August 5, 2010

North Korea puts price limits on corn, rice 

North Korea has added corn and rice to the list of items to be monitored for price hikes at markets in Pyongyang, according to a South Korean official.

According to the Unification Ministry official who spoke on the condition of anonymity because the information is classified, North Korean authorities have recently introduced price caps on the two staple foods at markets in Pyongyang.

"The regime appears to be increasingly allowing markets to take over the role its rationing system once played," the official said, adding the two items were absent from the monitor list when his ministry obtained a copy of the document in February this year.

North Korea allows a limited number of markets to operate under strict rules. It apparently cracked down on its growing merchant class when it conducted a sweeping currency reform late last year.

Observers said the botched reform has worsened food shortages by making merchants hoard food supplies, even triggering rare social unrest in some parts of the country. Pyongyang has so far been generally considered walled from the food shortages.

In addition to the food woes, North Korea is placed under tough US-led sanctions for its nuclear testing. The US said this week that it is considering more measures to make the North correct its provocative behaviour and abandon its nuclear arms programmes.

In a related development, a Unification Ministry report said earlier this week that the prices of farm products such as chickens, corn, beans and rice shot up two to three times from February to July this year in North Korea.

The report said the sharp price increases can also be attributed to the appreciation of the Chinese yuan. As North Korea imports many of its products from China, the rise of the yuan's value can affect the purchasing power of North Korea.