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Rising commodity prices and exchange rates hit ordinary businesspeople hard

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Street market in Hyesan, Ryanggang Province rice sellers dollar rate
FILE PHOTO: North Koreans are seen peddling goods at a street market in Hyesan, Yanggang Province. (Daily NK)

North Koreans who make a living by selling goods on the street are being hit hard by rising prices of commodities and climbing KPW-USD exchange rates.

A source in Yanggang Province told Daily NK on Monday that an increasing number of street vendors in the city of Hyesan have been calling it quits since the middle of last month.

As the KPW-USD exchange rate rises, street vendors have been losing money because they are unable to raise prices for consumers even though wholesalers are charging more for the goods they buy.

If the value of one dollar goes up a thousand won from KPW 7,000 to KPW 8,000, for example, wholesalers raise their prices for retailers proportionally (by 14.2%). That means that street vendors making their purchases in won now have to pay KPW 114,200 for items they had previously bought for KPW 100,000.

So while street vendors are paying wholesalers more won for the same goods, customers are turned off by even the slightest rise in prices. With vendors unable to raise prices, they are gradually losing more and more money.

“This has taught me once again that I need to get my hands on a few dollars. When the dollar is strong, wholesalers want dollars instead of won. When I have to buy goods with won because I don’t have any dollars, I lose money on the deal, which undermines my confidence in our currency,” one rice vendor told Daily NK’s source in the country. 

Street vendors’ business is also being affected by the rising price of raw materials.

The price of injogogi (“artificial meat,” a North Korean dish made of rice and leftover soybean paste) has risen from KPW 3,700 at the end of July to KPW 5,300, and the price of rice has been going up, too, currently trading in the KPW 6,500-7,000 range.

Faced with higher prices for ingredients, food vendors need to either raise their prices or shrink their portions. But doing so drives away customers and makes it hard to stay in business, the source said.

According to the source, a Hyesan vendor who had been selling injogogi on the streets for the past five years described her troubles as follows: “I can go around all day with a kilogram of injo-gogi I’ve made and barely sell a third of it. I go out hoping for a bit of luck, but come back emptyhanded so often that I’ve run out of capital. Things have gotten to the point that I may have to stop selling injogogi.”

Injogogi is popular because it tastes good and because you can eat your fill for cheap. As a result, the people who buy it tend to be down on their luck. If portions get smaller and the price goes up as well, they won’t buy it anymore,” the source explained.

As street vendors struggle with the lopsided exchange rate and rising prices, one seller in Hyehwa-dong, a neighborhood in Hyesan, decided to quit the rat race altogether, the source said. He reportedly sold his house and moved with his family to a remote area, where they are now living in a tent.

“More people have been selling their homes and moving into the woods these days. That indicates just how hard it has become to make a living, but our pathetic government ignores their plight and just bangs away at regime propaganda,” the source said.



Read More: Rising commodity prices and exchange rates hit ordinary businesspeople hard

2022-08-10 01:10:07

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