Highlights

Based on data from the Democratic People’s Republic of Korea (DPRK) and United Nations agencies, the estimated net deficiency in food grains and other crops on a grain equivalent basis (potatoes and soybeans) increased dramatically from 29,000 metric tons in marketing year (MY) 2014/15 (November/October) to 392,000 metric tons in MY 2015/16. This estimated net shortage was primarily a result of lower rice production caused by drought and a continued trend in decreasing imports. Despite the food grain deficiency, food prices have remained relatively stable, which suggests the numbers here may not show a complete picture of food availability, as the total cross-border trade with China is difficult to estimate. While flooding occurred in August 2016, the effects will be seen in the potato crop for MY 2016/17. Although United Nations sanctions do not prohibit grain trade or humanitarian aid, the perceived increase in difficulty in doing business within the country has greatly limited the willingness of exporters and donors to focus on the North Korean market.

Production

On April 27, 2016 the World Food Program (WFP) released data covering staple food production in the Democratic People’s Republic of Korea (DPRK) for marketing year (MY) 2015/16 (November/October). This data was based on calendar year 2015 official fall harvest estimates and 2016 early season crop production estimates by the DPRK Ministry of Agriculture (MoA) as well as 2015 crop production estimates of sloping lands and kitchen gardens (grown in upland areas) by the WFP and the Food and Agriculture Organization of the United Nations (FAO). DPRK food production is generally managed by the government on state-owned property. However, upland food production is managed by private individuals looking to supplement their incomes.

In MY 2015/16, total production of grain and other crops on a grain equivalent basis (potatoes and soybeans) reached an estimated 5.42 million metric tons (in cereal equivalent basis for potatoes and paddy basis for rice), down 9.2 percent from the previous marketing year. Sharply declining rice production after a severe drought in the planting season of 2015 (April – June 2015) accounts for most of this total decline.

Low precipitation in 2014 culminated in a severe drought during the 2015 planting season and a shortage of water for irrigation, and led to an 11 percent reduction in harvested rice area from the previous year. As a result, total rice production was down 26 percent from the previous year, amounting to only 1.95 million metric tons (paddy rice basis). The drought especially impacted irrigated rice planting in the important production areas of South Hwanghae and North Hwanghae provinces, resulting in a 23 percent decline in harvested rice area in both provinces.

Planted area for corn increased after land suffering from drought was converted from rice to corn cultivation. However, despite an increase in corn planted area of five percent over the previous year, corn production in the government-owned collective farms was estimated at 2.29 million metric tons, down 2.6 percent from the previous year due to dry weather. Drought-afflicted irrigated rice land was also converted to other crops. This increase in available arable land led to an estimated increase in production of soybeans and other crops such as sorghum, millet and buckwheat. MoA and FAO both forecast the production of 2016 summer crops on government-managed lands at around 363,000 metric tons, 35 percent higher than the 2015 summer harvest. The 2016 summer crop projections include 297,000 metric tons of potatoes (cereal equivalent) and 66,000 metric tons of wheat and barley. Severe flooding along the Tumen River in July 2016 did not impact MY2015/2016 potato production, as this data includes harvests in November 2015 and June 2016. However, the flooding is expected to have severely impacted potatoes produced in the North Hamyong province that were harvested in November 2016.

FAO forecasts that in MY 2015/16 crop production outside of government management decreased from the previous year to 203,000 metric tons of corn from sloping lands (terraced upland) farming and 75,000 metric tons from household gardens (50,000 tons of potatoes (cereal equivalent) and 25,000 MT of corn).

Consumption

For MY 2015/16 (Nov/Oct), WFP/FAO estimated that total DPRK utilization of grain and other crops on a grain equivalent basis was 5.50 million tons. Converting total domestic crop production into grain equivalent yields 4.8 million metric tons, which consists of 1.3 million metric tons of milled rice, 2.5 million metric tons of corn, 0.52 million tons of potatoes (cereal equivalent), 0.27 million metric tons of soybeans (cereal equivalent) and 0.2 million metric tons of other grains. Therefore, the estimated gap between production and utilization is 692,000 metric tons. As expected DPRK imports were only 300,000 metric tons during this marketing year, the unmet deficit of food grains is estimated to be 392,000 metric tons. This shortage is significantly greater than the shortage of 29,000 metric tons in MY 2014/15. While this shortage is significant, food prices in the DPRK have remained stable as marketization has taken hold in the country. The stability of prices, along with the difficulty of estimating true trade across the DPRK-China border, leads Post to conclude that the grains shortage reported here may be being tempered by movement of foods and money throughout the country.

In CY 2016, total reported food grain imports including food aid are forecast at only 100,000 metric tons. This number is significantly lower than the number of forecast imports because it represents only the official reported number. One major change that has been taking place in recent years is an increase in marketization of North Korea, which has led to more trade in grains in an unofficial capacity.In CY 2015, DPRK imported 107,000 metric tons of food grains in the form of commercial imports and food aid. Commercial imports totaled 79,000 metric tons, consisting mainly of wheat flour, corn, rice and soybeans from China and Ukraine. Food aid was primarily given as multilateral food assistance from WFP/FAO, and totaled 28,204 metric tons.

The decrease in both food aid and commercial imports may have been caused inadvertently by tightening UN sanctions policies. While commercial food trade and humanitarian aid are not restricted by current sanctions, humanitarian agencies have reported that banks are reluctant to make money transfers to North Korea, and shipments of humanitarian goods are sometimes blocked. The perception that these types of difficulties are inevitable has also prevented would-be donors from contributing.

Despite these constraints, in recent years the DPRK has increased marketization of commodities and developed a distribution industry. These changes have resulted in a more competitive market with relatively stable prices. Commodities are able to move relatively unimpeded from the border region to other areas throughout the country. These market forces, combined with high demand for food coming from China that may not be reflected in official trade numbers, suggest that the food deficit in the DPRK may not be as great as the numbers here imply.


DPRK: Food Grain and Oilseeds Import from China

(Calendar year, Metric Ton)

Commodity

2011

2012

2013

2014

2015

2016a/

Wheat

0

0

0

0

0

0

Rye

0

0

0

0

0

0

Barley

1

600

0

1

0

0

Oats

0

0

0

0

0

0

Corn

135,751

54,444

76,572

15,658

9,891

1,758

Rice

92,242

49,010

49,528

63,884

17,138

30,169

Sorghum

0

0

0

24

0

0

Others

3,302

637

960

720

120

0

Subtotal, Grains

231,296

104,691

127,060

80,287

27,149

31,927

Wheat Flour

124,963

157,704

155,886

78,967

14,437

3,022

Soybeans

20,171

19,236

15,311

2,019

6,015

147

Grand Total

376,430

281,631

298,257

161,273

47,601

35,096