Commercial transactions in North Korea centered around farmer markets are expanding in size and getting organized, indicating the possibility of accumulating capital and gradually growing into a capitalist market, according to an official report in South Korea. The expanding function of the marketplaces, coupled with the positive economic growth of the country, greatly contribute toward lowering and stabilizing prices, adds the report.

A survey report on price movements in North Korea's farmers' markets in 2001, released by the Ministry of Unification, notes that price deviations among regions are being lowered as inter-regional goods movement becomes more active and quantities of goods marketed increase. Groups of four or five people start businesses by raising funds among themselves and surreptitiously hiring trucks from military units or corporations. Capital mobilized for private businesses sometimes surpasses NKW10,000, according to the report. One American dollar is exchanged for NKW2.15 officially and up to NKW200 unofficially.

In general prices are lower in North Korea's border areas with China, medium in large cities and higher where transportation is inconvenient. On a scale of 100, rice is priced at 80.8 in Shinuiju, bordering on Dandong, China, 106.1 in Pyongyang and 121.1 in Danchon, South Hamgyong province.

The farmers' markets recently have shown a trend toward specialization in marketed commodities. For example, greater quantities of imported consumer electronics and light industrial products are marketed in Pyongsong, South Pyongan province; fisheries products in Rajin and Chongjin, North Hamgyong; and herbs and metals in Hyesan and Musan, both remote cities in mountainous regions. With varieties of goods sold at the marketplaces also being boosted, tropical fruits such as bananas and pineapples are now available at some places. Demand for color TV sets and refrigerators has also risen. As a result, the population says: "One cannot purchase commodities not because they are unavailable, but because one has no money."

With 1998 prices set at 100, prices in North Korea fluctuated to 86.1 in 1999, 91.0 in 2000 and 66.3 in 2001. Farmers' market prices fell 27.1% this year from last year thanks to falling prices in meat, clothing and consumer electronics, though grain, fish and shellfish prices rose. A kilogram of rice is priced at NKW49.5, a kilogram of pork at NKW138.4, an egg at NKW10, cabbage at NKW14.1 per bundle, one kilogram of salt at NKW13.8, a pair of shoes at NKW700 and a bar of soap at NKW82.5.

Despite regular crackdowns by the authorities, the report concludes, the farmers' markets will become more and more active "not least because the citizens perceive the marketplaces as essential for their survival, but because the substructure of agencies of power, in efforts to make surreptitious income, involves itself in marketing by issuing passes and offering motor vehicles."

(Lee Kyo-kwan, haedong @chosun.com)