World food prices has risen dramatically over the last period and moves on to affect even reclusive North Korea. Globally, China may hold the key to world food prices (Jing Ulrich, here), but biofuels (IMF, here) and poor harvests also play significant roles (see also this great FT site on food prices). As China takes the world on a ride of agflation (the Economist, here), or simply stops exporting deflation, this also shows how North Korea is in it with the rest of us – or at least the less well off parts of the world.
A Hankyoreh article (here) says up until now an average of 1,200 tons of food has crossed the border at Dandung, Liaoning Province, daily! As of 2008 the Chinese government has not issued any new export permissions. The article says 80 to 90 per cent of Chinese food aid, which has now completely stopped, used to pass through Dandung.
For food aid in general, the World Food Programme fears cut in assistance, and the Food and Agriculture Organisation estimates poor countries will have to pay 35 per cent more for their cereals imports (here). The only benefactors of the rising food prices must be the protected South Korean farmers whose products will seem a little bit less expensive as consumers lately (2004-06) have paid more than two and a half times the prices on world markets (OECD, here).
Tags: agflation, aid, China, Dandung, FAO, food aid, Food and Agriculture Organisation. WFP, Hankyoreh, inflation, Liaoning Province, North Korea, World Food Programme
