The North Korean authorities have issued public price ceilings in the markets that widely diverge from market prices. The policy, which does not involve a logical understanding of what drives price fluctuations, is being criticized as an “unrealistic measure” by vendors and customers alike.
“The price ceilings posted in the markets reveal just how little the authorities really care about our real living conditions,” a source in North Hamgyong Province said in a telephone call with Daily NK on March 24. “Local residents are laughing at the rates because some of them are lower and some of them are higher than the going market rate for goods in different towns and cities.”
“The authorities have instructed vendors to sell rice at 4,800 KPW, which is close to the current market rate. Flour, however, is to be sold at 1,300-1,500 KPW below the market rate, resulting in frustration among the vendors,” the source said, further explaining that people feel "that the prices are decided by an absent-minded official with no knowledge of the local conditions.'"
A source from Ryanggang Province added, “Merchants normally calculate prices by considering the capital investment and leave a little room for profit.” Describing the local atmosphere, the source said, “People are complaining that the authorities are ignorantly lowering the prices.”
The authorities have ordered merchants to sell corn for 2,300 KPW per kilogram, which is 220 KPW more than the current market rate. Chinese-made soybean oil is trading at 9,450 KPW per kg in the market, but the authorities have ordered vendors to sell at no more than 7,480 KPW.
“Merchants who are unable to absorb a 2,000 KPW loss have simply stopped selling soybean oil,” said the Ryanggang-based source. “Some vendors have put corn up for sale at the new higher price, but the price hike is causing consumers to refrain from purchase.”
Vegetables are particularly vulnerable to climate conditions and harvest quality, and prices usually reflect these factors.
Farmers are saying that "nobody knows the prices better than the people who farm them," according to the source in Ryanggang Province. Along similar lines, he continued, "Some merchants are saying, “If I buy a product for 1,000 KPW and am forced to sell it at 500 KPW, how am I supposed to make a profit?”
Some residents attribute the authorities’ intervention to price jumps that are currently across the country’s markets.
“Residents are concerned that a routine order carried out by the authorities is capable of causing such far-reaching disturbances. On top of the price ceiling measure, there is also a rumor that cigarette exports have been severed and that Taedonggang (Taedong River) Cigarette Factory has closed down. These new measures are like adding gasoline to a fire,” said a separate source in Ryanggang Province.
“Other developments are also frustrating consumers and vendors in the markets, such as the sudden appearance of cheap canned beer produced by Taedonggang (Taedong River) Brewing Company."