North Korean State Trading Firms Raise Cash on Food Imports From China

2017-11-15
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Goods bound for North Korea are shown at a customs checkpoint in China in a file photo.
Goods bound for North Korea are shown at a customs checkpoint in China in a file photo.
AFP

Business firms tied to North Korea’s cash-strapped regime are earning money for Pyongyang by purchasing farm products and other goods cheaply in China and selling them for higher prices at home, sources say.

The move has disadvantaged North Korean farmers, who can’t compete, a source in North Korea’s North Hamgyong province, bordering China, told RFA’s Korean Service.

“Preference for North Korean products is just rhetoric,” RFA’s source said, speaking on condition of anonymity.

“Businesses set up to earn foreign currency are now importing goods indiscriminately, even goods that can be produced locally, so that residents have no chance to make a living selling their goods at market,” the source said.

Goods brought in from China include not only farm products but also things needed for daily use, the source said.

“So people who used to make their living selling hand-made furniture, bicycle tires, belts, and fresh eggs from backyard chickens are in trouble.”

“Residents who had depended on farming their own small plots of land are being hit the hardest,” he added.

Staples such as garlic, cucumber, chili peppers, and tobacco leaves had been profitably marketed for years by North Korean farmers, the source said.

“Now, though, garlic and fresh eggs from China are dominating the local markets. And chili peppers, the farmers’ last standby for making money, are being threatened because of the products being brought in from China.”

“The farmers are about to give up chili pepper farming,” he said.

Sold at high prices

Also speaking to RFA, a source in Yanggang province said that sanctions imposed by the U.N. to punish North Korea for its illicit weapons programs have led to the growing reliance on sales at home of imported food.

"These firms make their profit by importing food items and pricing them at home in foreign currency,” he said.

“The Namgang Trading Company,  Daesung Trading Company, Daehung Trading Company, and Neungla Trading Company are all actively importing food products from China.”

Other imports include tropical fruit, pork, seasonings, and even cabbages and radishes, the source said.

“Lately, they have begun importing chili pepper powder and capsaicin, which makes it hard for [North Korean]  farmers to earn a living from chili pepper farming.”

Garlic, chili peppers, and tobacco leaves could be bought from local farmers at lower prices, RFA’s source said.

“The money saved by doing this could then be used to import corn, and this would help to solve the problem of food shortages.”

“If these firms buy farm products from local farmers, the farmers can make a living, and this will eventually be a benefit to the country,” he said.

Imports not sanctioned

Apart from North Korea’s formerly profitable trade in seafood, now banned under U.N. sanctions, the cross-border trade in farm products may be legally allowed, sources say.

Speaking on condition he not be named, an official at the U.N.’s 1718 DPRK Sanctions Committee told RFA that the trade in goods such as food for humanitarian purposes is not subject to sanctions.

“[U.N. Security Council] sanctions are pretty narrowly focused,” added American Enterprise Institute North Korea expert Nick Eberstadt.

“If these transactions are not done by a military-related concern, they would seem to me to fall outside the strictures of [U.N.] resolutions,” Eberstadt said.

“Energy has been sanctioned, but not yet food, right?”

Reported by Sunghui Moon and Kyung Ha Rhee for RFA’s Korean Service. Translated by Leejin Jun. Written in English by Richard Finney.

CH. 1: MANDARIN | CANTONESE

CH. 2: VIETNAMESE | BURMESE | KOREAN

CH. 3: KHMER | LAO | UYGHUR

CH. 4: TIBETAN

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