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Marc Noland began our collaboration around food issues, but it has been some time since we have had to focus attention on the issue. But DailyNK data shows that rice prices ticked up over 10% in June alone. We now have a new FAO update (.pdf) that provides some detail on the drought the country has faced in recent months, which may help account both for these short-term trends and for some longer-range vulnerabilities over the horizon.
The valuable new information in the report is in an analysis of patterns of precipitation done by the European Commission’s Joint Research Centre (JRC), supplemented by a visit to South Hwanghae province in late June by the UN Agencies, the European Union, and NGOs still operating in the country. Two figures tell the story, and they are reproduced below. The first shows precipitation in the four main grain-growing provinces—accounting for about 2/3 of output—for April to June. The table benchmarks 2017 precipitation against the long-term average (LTA) but also against 2001.
Why 2001? That choice is explained by the second graph which shows total serial production going all the way back to the 1982-83 crop cycle. The plunge in domestic production associated with drought is obvious, but the low point was actually in 2000/1, when a relapse of serious distress and even famine was prevented by robust food aid and—to a lesser extent—commercial imports.
The weather patterns have two distinct effects. The first is on the growing season for the main staple crops—rice, corn, soybeans, and potatoes—that are harvested in the fall. After a dip in 2015, also drought related, this crop rebounded in 2016 but is now headed for a potential fall depending on weather patterns between now and the harvest. The FAO report estimates import needs at 458,000 tonnes. Assuming the official import target of 200,000 tonnes is met, this would leave an uncovered deficit of 258,000 tonnes for the current marketing year, a gap which is lower than in 2015/16, but still higher than in 2012/13 and 2014/15.
But the drought also affects winter and spring wheat and barley that are typically harvested in June. The FAO has lowered the initial production forecast on this early season crop production to 310 000 tonnes (cereal equivalent), over 30 percent less than in 2016. Although these crops only account for about 10 percent of total grain prodution, the sharp decline in output could help explain the steepness of the run-up in food prices during the current lean season as markets adjust to shortages.
The FAO report has a somewhat alarmist tone, and weather could still turn around. But the broader picture is sadly familiar, and the report subtly reminds its readers of some standard structural issues. While Kim Jong Un is building missiles, nuclear weapons and apartments in Pyongyang, only about 60 percent of the arable area undergoes mechanized land preparation, with the remaining land being prepared by oxen. Feritilizer inputs appear to be up from last year, but investment in irrigation lags and reservoirs are 40 percent off normal levels. Is this yet another example of Kim Jong Un’s overconfidence setting the country up for trouble?
