(Bloomberg) -- Investors worried about geopolitical risk on the Korean peninsula may be able to obtain insights into the level of tension from an unexpected source -- North Korea’s demand for corn.
Imports of the grain from China, Pyongyang’s largest trading partner, have spiked at the same time as past provocations by leader Kim Jong Un and his father Kim Jong Il, according to a Bloomberg analysis of monthly volume over the past 10 years.
Spikes from June to August this year coincided with a series of missile tests and saber-rattling between Kim and U.S. President Donald Trump. Other spikes came when missile tests disrupted six-party negotiations in 2009 and when North Korea reopened its nuclear facilities in 2013.
Read more about omens of war and peace on the Korean peninsula.
While the monthly numbers are volatile, the increase in corn demand potentially signals a need to stockpile food supplies in case of increasing tension, said Lee Seog-Ki, senior research fellow at the Korea Institute for Industrial Economics and Trade in Seoul.
“The incentive for North Korea to stockpile agricultural products if they think sanctions are going to be imposed definitely exists,” Lee said. “North Korea does care about pricings of agricultural products and market conditions, so when they can import more, they hoard.”
Pyongyang imported more than 45,000 metric tons of corn from China from June to August, 92 percent of the almost 49,000 metric tons exported by the country in total in that period, the data show. The imports came just ahead of what North Korea claimed was its most powerful nuclear test in September, of a hydrogen bomb with “unprecedentedly big power.”
Yet that three-month total is dwarfed by the 50,600 metric tons of corn North Korea bought in September 2013, when satellite imagery appeared to show the country had recently restarted its Yongbyon nuclear complex for the production of plutonium.
North Korea has also struggled with a drought this year that the United Nations’ Food and Agriculture Organization warned in July could severely damage domestic crop production.
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