On the value of speculation in food markets

Via, this.

Since the mid-2000s, as market economics expanded in the North, food prices tended to shoot up during the lean season of April~May every year. After potato and barley harvests in late June, prices again rise until September, when food prices tend to drop in anticipation of fall grain harvests. Because of this trend, most market traders spend November and December concentrating on buying up food stocks, and they then actively sell their food stores after April. Government authorities have also been known to stockpile food at the end of a year in order to resell after April at considerably higher prices. This regular fluctuation of prices also leads most North Koreans to stockpile all the food they can in December and January.

Straight out of Adam Smith that is.

The speculation, the stocking and hoarding, help to reduce the variability in prices.

Isn\’t it interesting to see that even in a socialist hell hole like North Korea the basic economic verities still apply?

1 thought on “On the value of speculation in food markets”

  1. Steady on. If you start defending speculation in the substances of nature, you’ll start to get the LVT fanatics after you.

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