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BEIJING – Measures to stabilize soaring domestic food prices in China have resulted in tighter controls on grain imports, which is likely to threaten food aid to North Korea.
China is one of the largest providers of food aid to the impoverished North, where severe flooding in August destroyed crops and further depleted food supplies.
In Dandung, Liaoning Province, near China’s border with North Korea, food exports to the impoverished country have been completely suspended. Up until now, an average of approximately 1,200 tons of food has crossed the border every day, but as of the beginning of the year, the Chinese government has not issued any new permissions for exports.

An official in Dandung said on January 4, “We can’t send trains carrying flour to North Korea. We have applied to the authorities for permission but we have no idea when we will get it.”

China’s Ministry of Commerce on January 1 issued emergency decrees, including an imposition of export duties of 5 to 25 percent on major grains such as rice, wheat, corn and beans. The ministry has also adopted an export quota system for powdered goods, including flour.

China began blocking grain exports in late December of last year in order to stabilize domestic food prices. On December 20, 2007, Beijing suddenly abolished tax incentives for grain exports. Since then, food assistance to North Korea has been completely stopped. As China has refused to permit food exports, officials are finding it useless to try to pay duties on grains.

An official who has participated in a project to provide food assistance to North Korea for almost 10 years said, “Wheat and corn prices have climbed about 600 yuan (about 73,000 won or USD$78) per ton due to export duties,” adding, “Even if we were to buy grain at high prices, we wouldn’t be able to send it to North Korea because we wouldn’t be able to obtain export permission from China.”

Almost 80-90 percent of food aid to North Korea is delivered via Dandung. If the current situation continues for an extended period of time, North Korea’s food supplies are expected to deteriorate quickly.

The official in Dandung noted that the demand for food will climb in North Korea owing to what is anticipated to be another season of poverty in the spring. “If external shipments of food aid are blocked, North Korean residents will be forced to depend on smuggling or flee the nation,” the official added.

China’s control over grain exports is expected to increase in the future. Due to a grain price hike last year, China’s consumer price index rose approximately 4.7 percent. The index climbed to 6.9 percent in November, the highest in 11 years. With international oil prices close to US$100 per barrel, China has been under increasing pressure from the threat of inflation. “As China bolsters its control of consumer prices, it will aggravate the North’s food shortage,” the official said.



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