P 270102Z AUG 09
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UNCLAS SEOUL 001374 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD ENRG KS KN
SUBJECT: DPRK ECONOMY - 2008 FOREIGN TRADE FIGURES 
 
Ref: (A) 07 SEOUL 2286 (B) Seoul 4169 
 
 
¶1. (U) This cable is sensitive but unclassified and not rpt not 
intended for internet distribution. 
 
¶2. (SBU) SUMMARY:  According to data compiled by the (South) Korea 
Trade and Investment Promotion Agency (KOTRA) and the ROK Ministry 
of Unification (MOU), DPRK foreign trade amounted to USD 5.64 
billion in 2008, a 19 percent year-on-year increase, and reached the 
highest level since 1991.  DPRK exports totaled USD 2.06 billion, up 
23 percent from 2007.  DPRK imports reached USD 3.58 billion, a 17 
percent year-on-year increase.  This growth is primarily the result 
of an increase in Chinese investment and an expansion of Sino-DPRK 
trade.  In 2008, the DPRK became more economically dependent on 
China.  Trade with China accounted for 49.5 percent of the DPRK's 
total trade, up from 42 percent in 2007.  Inter-Korean trade, which 
grew by 1.2 percent, accounted for 32 percent of the DPRK's foreign 
trade in 2008, down from 39 percent in 2007.  The DPRK's trade 
deficit rose to USD 1.5 billion in 2008, a record high.  The DPRK's 
top ten trading partners in order by volume were: China, South 
Korea, Singapore, India, Russia, Brazil, Thailand, Germany, the 
United States, and the Netherlands.  U.S food aid volume of USD 52 
million moved the United States onto this list.   End Summary. 
 
¶3. (SBU) Explanatory Notes -- (South) Korea Trade and Investment 
Promotion Agency (KOTRA), a branch of the Ministry of Knowledge 
Economy (MKE), compiles DPRK trade data using statistics from the 
DPRK's trading partners.  Its figures do not include inter-Korean 
trade as the ROKG officially considers North-South trade as domestic 
transactions. 
 
-- Inter-Korean trade figures compiled by the ROK Ministry of 
Unification (MOU) have been included in the 'trade by country' data 
below (paragraphs 5 and 6).  Due to the MOU's different system of 
categorizing data, however, inter-Korean trade figures by product 
category are not included in the 'trade by product' section 
(paragraphs 20-24). 
 
-- Unless otherwise noted, all percentage changes in this report are 
year-on-year. 
 
------------------ 
DPRK FOREIGN TRADE 
------------------ 
 
¶4. (SBU) Despite international concerns over its nuclear weapons 
program, the global financial crisis, and unstable international 
grain markets, the DPRK continued to expand its foreign trade in 
¶2008.  The largest contributing factors include: 
 
-- An increase in the price of the DPRK's mineral fuel imports, 
which include crude oil and refined oil products, due to the rising 
price of crude oil; 
-- Increased exports of raw materials and finished goods to the ROK 
through the Kaesong Industrial Complex (KIC); 
-- An increase in the DPRK's textile imports as part of the 
government's attempt to revitalize the country's light industries; 
-- An increase in the DPRK's iron ore exports to China; 
-- Expanded trade with Singapore; 
-- Food aid shipments, particularly from the United States; 
-- An increase in the DPRK's import of Chinese machinery and 
electric equipment. 
 
 
DPRK TRADE PER ANNUM 
-------------------- 
(USD MILLION, PERCENT) 
 
     DPRK EXPORTS        DPRK IMPORTS        TOTAL TRADE 
     ------------        ------------        ----------- 
YR   VALUE     CHANGE    VALUE  CHANGE     TOTAL    CHANGE 
 
91    951      (45.5)    1,745   32.7)     2,696     (38.0) 
92    944       (0.7)    1,785    2.3      2,729       1.2 
93    998        5.7     1,834    2.7      2,832       3.8 
94    876      (12.2)    1,418   22.7)     2,294     (19.0) 
95    800       (8.7)    1,539    8.5      2,339       2.0 
96    797       (0.4)    1,432   (7.0)     2,229      (4.7) 
97  1,020       28.0     1,465    2.3      2,485      11.5 
98    689       (32.5)     975  (33.4)     1,664     (33.0) 
99    727         5.5    1,087   11.5      1,814       9.0 
00    839        15.4    1,559   43.4      2,398      32.2 
01    877         4.5    1,796   15.2      2,673      11.5 
02  1,106        26.1    1,796    0.0      2,902       8.6 
03  1,212         9.6    1,903    6.0      3,115       7.3 
04  1,278         5.0    2,276   19.6      3,554      14.0 
05  1,338         5.0    2,719   19.5      4,057      14.0 
06  1,466        10.0    2,879    5.9      4,345       7.0 
07  1,684        14.9    3,055    6.1      4,739       9.0 
08  2,062        22.5    3,574   17.0      5,636      18.9 
 
(SOURCE:  KOTRA AND MOU DATA) 
Note:  Figures in parentheses indicate negative growth. 
 
 
--------------------- 
DPRK TRADE BY COUNTRY 
--------------------- 
 
¶5. (SBU) In 2008, the DPRK's top ten trading partners were: China, 
South Korea, Singapore, India, Russia, Brazil, Thailand, Germany, 
the United States, and the Netherlands.  China accounted for nearly 
half of the DPRK's foreign trade, deepening the DPRK's dependence on 
China.  While inter-Korean trade grew in absolute terms, the ROK's 
share of DPRK foreign trade dropped from 38 percent in 2007 to 32 
percent in 2008.  This decline in the importance of North-South 
trade follows the chilling of inter-Korean relations that has taken 
place since ROK President Lee Myung-bak's inauguration in February 
of 2008.  The DPRK's trade deficit with China expanded from USD 811 
million in 2007 to USD 1.3 billion, strengthening Chinese influence 
over the country. U.S. food aid shipments (143,000 metric tons (mt) 
of wheat, corn, and beans) resulted in the United States becoming 
the DPRK's ninth largest trading partner.  DPRK exports to Japan, 
which had been declining since 2006, fell to zero as a result of 
Japan's implementation of economic sanctions in 2007.  The ten 
aforementioned nations accounted for 93.4 percent of the DPRK's 
foreign trade, slightly down from 95 percent in 2007.  The DPRK's 
trade with China and the ROK accounted for nearly 82 percent of its 
total trade. 
 
¶6. (SBU) The following is a breakdown of trade between the DPRK and 
its top ten trading partners: 
 
--------------------------------------- 
DPRK'S TOP TEN TRADING PARTNERS IN 2008 
--------------------------------------- 
 
(USD MILLION, PERCENT) 
 
DPRK          EXPORTS    IMPORTS    TOTAL  SHARE   BALANCE 
 
¶1. CHINA       754       2,033    2,787.0   49.5 (1,279.0) 
¶2. S. KOREA    932         888    1,820.0   32.0     44.0 
¶3. SINGAPORE     0.3       120      120.3    2.1   (120.0) 
¶4. INDIA        67          53      120.0    2.1     13.8 
¶5. RUSSIA       13.5        97      110.5    2.0    (83.5) 
¶6. BRAZIL       38          43       81      1.4     (4.2) 
¶7. THAILAND     29          48       77      1.4    (18.8) 
¶8. GERMANY      20.9        31.5     52.4    0.9    (10.6) 
¶9. USA           0          52.2     52.2    0.9    (52.2) 
10.NETHERLANDS  26          16.8     42.8    0.8     (9.2) 
 
SUB-TOTAL    1,881.4      3,382    5,264    93.4    (1,501) 
 
TOTAL        2,062        3,574    5,636   100.0    (1,512) 
FOREIGN 
TRADE 
 
(SOURCE: KOTRA AND MOU) 
 
CHINA 
----- 
 
¶7. (SBU) The DPRK grew economically more dependent on China as the 
country slipped deeper into international isolation, a result of 
sanctions imposed on it by the United Nations Security Council in 
light of its continued development of nuclear weapons.  Sino-DPRK 
trade grew by 41 percent to USD 2.8 billion, a record high.  DPRK 
exports to China rose by 30 percent to USD 754 million, while its 
imports from China grew by 46 percent to USD 2.03 billion, marking 
the highest rate of growth in the last ten years.  The DPRK's 
increasing dependence on Chinese crude oil and textiles resulted in 
the DPRK's trade deficit with China rising to USD 1.3 billion. 
According to the KOTRA, the primary causes of this trend are as 
follows: 
 
-- The impact of economic sanctions imposed by the international 
community in light of its continued nuclear weapons program, the 
DPRK must now import more goods from China; 
-- China is geographically adjacent to the DPRK; and 
-- Chinese goods are relatively inexpensive. 
 
¶8. (SBU) Major DPRK exports to China included: iron ore, mineral 
fuels (mainly coal), steel, apparel, fishery products, and aluminum. 
 DPRK iron ore exports rose by 116 percent to USD 172 million, but 
wood and zinc exports dropped by 68 percent and 56 percent, 
respectively.  While the volume of the DPRK's coal exports to China 
declined by 32.2 percent (totaling 2.5 million mt), the value of 
DPRK coal exports to China were up by 24 percent, amounting to USD 
201 million in 2008, up from USD 163 million in 2007.  Major DPRK 
imports from China included: crude oil and refined oil products, 
machinery, electrical equipment, textiles, plastics, and apparel. 
The DPRK's import of Chinese grain, however, dropped from 136,000 mt 
in 2007 to 119,000 mt in 2008, a 12.5 percent decline.  The DPRK's 
import of Chinese rice fell from 80,741 mt in 2007 to 20,079 mt in 
2008, a 75 percent decline.  The DPRK's import of Chinese corn 
jumped to 97,606 mt in 2008, an 82 percent increase over the 53,699 
mt imported in 2007.  The DPRK's import of Chinese fertilizer fell 
from 60,460 mt in 2007 to 31,633 mt in 2008, a 48 percent decline. 
Despite this decline in volume, rising fertilizer prices drove the 
value of the DPRK's Chinese fertilizer imports up by 37.5 percent. 
 
 
DPRK GRAIN IMPORTS FROM CHINA 
----------------------------- 
(Unit: USD 1,000, METRIC TON, GROWTH IN PERCENT) 
 
                VALUE                   VOLUME 
                -----                   ------ 
              2007    2008  Growth    2007     2008  Growth 
            ----    ----  ------    ----     ----  ------ 
Barley         8     160   1,900      28      390   1,293 
Corn      10,178  27,637     17   53,688   97,606      82 
Rice      25,764   6,721    (74)  80,741   20,079     (75) 
Millet         1      30   2,90        4       67   1,575 
Others       560     327    (42)   1,547      800     (48) 
 
TOTAL     36,511  34,875   (4.5) 136,008  118,942   (12.5) 
 
 
DPRK MINERAL FUEL IMPORTS FROM CHINA 
------------------------------------ 
(Unit: USD 1,000, METRIC TON, PERCENT) 
 
                   VALUE                     VOLUME 
                   -----                     ------ 
ITEM         2007    2008   Growth    2007    2008   Growth 
             ----    ----   ------    ----    ----   ------ 
 
Crude Oil  281,979  414,310   46.9  523,160  528,577   1.0 
Coal        19,994   44,437  122.3  528,577  231,804   2.0 
Refined Oil 95,407  120,073   25.9  147,679  117,743 (20.3) 
Products 
 
TOTAL   397,380   578,820  45.7   1,199,416  878,124 (26.8) 
 
Note:  Figures in parentheses indicate negative growth. 
 
 
SOUTH KOREA 
----------- 
 
¶9. (SBU) Inter-Korean trade grew by 27.8 percent in 2006, 33.2 
percent in 2007, and 1.2 percent in 2008, reaching USD 1.82 billion 
by the end of last year.  DPRK exports to the ROK grew to USD 932 
million in 2008, a 22 percent year-on-year rise, while DPRK imports 
from the ROK fell to USD 888 million, a 14 percent year-on-year 
decline.  The ROK's Ministry of Unification attributes the modest 
growth in overall trade to the appreciation of the U.S. dollar, 
implicitly highlighting the DPRK's hard currency shortage.  Despite 
recording trade deficits with most of its major trading partners, 
the DPRK managed to achieve a USD 44 million trade surplus with the 
ROK in 2008. 
 
¶10. (SBU) In 2008, commercial transactions between the two Koreas 
increased by 20 percent to USD 1.7 billion, while non-commercial 
transactions, which consisted primarily of shipments of ROK 
humanitarian aid to the DPRK, fell precipitously.  In the past, the 
ROK has sent around 300,000 mt of fertilizer and 400,000-500,000 mt 
of rice annually to the DPRK; however, due to a chilling of 
inter-Korean relations, no such shipments were sent in 2008.  Due to 
the double counting of outbound and inbound shipments of materials 
used in processing-on-commission (POC) and to the double counting of 
unfinished goods produced in the Kaesong Industrial Complex (KIC), 
inter-Korean trade data may not be accurate.  Major DPRK exports to 
the ROK included: textiles and garments produced in the KIC, 
agricultural and fishery products, minerals, and electric machinery 
parts manufactured by ROK firms in the DPRK.  Major DPRK imports 
from the ROK included: raw materials used to manufacture textiles in 
the KIC, machinery, steel and metal products.  The following is a 
breakdown of inter-Korean trade goods by category: 
 
 
DPRK EXPORTS TO THE ROK 
----------------------- 
(Unit: USD 1,000, GROWTH IN PERCENT) 
 
ITEM                     2007     2008    GROWTH 
----                     ----     ----    ------ 
Textiles               190,541  324,831    70.5 
Agricultural/Fishery   184,189  207,914    12.9 
Minerals               120,796   99,787   (17.4) 
Electric/Electronic     38,335   94,687   147.0 
Steel/Metal            165,938   88,192   (46.4) 
Machinery               35,887   59,108    64.7 
Household Goods         18,912   38,991   106.2 
Plastics/Rubber          4,764   10,961   130.1 
Chemicals                4,589    6,418    39.9 
Miscellaneous            1,395      640   (54.1) 
 
TOTAL                  765,346  932,250    21.8 
 
 
DPRK IMPORTS FROM THE ROK 
------------------------- 
(Unit:  USD 1,000, GROWTH IN PERCENT) 
 
ITEM                     2007     2008    GROWTH 
----                     ----     ----    ------ 
Textiles               214,149  210,035    23.6 
Machinery              136,290  157,385    15.5 
Steel/Metal             97,123  139,007    43.1 
Electric/Electronic    103,012  121,719    18.2 
Agricultural/Fishery   137,382   78,239   (43.1) 
Chemicals              203,000   68,874   (66.1) 
Minerals                79,443   45,528   (42.7) 
Household Goods         32,688   35,687     9.2 
Plastics/Rubber         21,800   29,996    37.6 
Miscellaneous            7,662    1,647   (78.5) 
TOTAL                1,032,550  888,117   (14.0) 
 
(SOURCE: MOU) 
Note: Figures in parentheses indicate negative growth. 
 
SINGAPORE 
--------- 
 
¶11. (SBU) The DPRK's trade with Singapore rose by 116.2 percent to 
USD 120.3 million in 2008, making Singapore the DPRK's third largest 
trading partner; however, trade with Singapore accounted for only 
2.1 percent of total DPRK trade.  This marked increase in 
DPRK-Singapore trade was mainly due the DPRK's increased importation 
of Singaporean goods.  DPRK exports to Singapore dropped by 68 
percent to USD 0.3 million, while DPRK imports of Singaporean goods 
rose 120 percent to USD 120 million.  Major DPRK exports to 
Singapore included shell fish products, seeds, and electric 
machinery.  Major DPRK imports from Singapore included minerals, 
tobacco, paper, and nonwoven fabrics.  DPRK imports of Singaporean 
refined petroleum products increased eleven fold in 2008, going from 
USD 365,000 to USD 41.6 million.  KOTRA analyses suggests that this 
dramatic increase is due to the fact that third countries were able 
to export refined petroleum products to the DPRK via Singapore and 
that these third country transactions were included in Singapore's 
total exports to the DPRK.  DPRK imports of Singaporean tobacco 
increased to USD 25 million, a 45.4 percent rise. 
 
INDIA 
------ 
 
¶12. (SBU) The DPRK's trade with India fell by 4.9 percent to USD 
120.2 million.  DPRK exports to India dropped by 26 percent to USD 
67 million, while DPRK imports of Indian goods rose by 49 percent to 
USD 53.3 million.  Major DPRK exports to India included steel, 
machinery, and precious metals.  Exports of DPRK plastics, which had 
previously been the DPRK's top export, fell from USD 13 million in 
2007 to USD 3.5 million in 2008, a 73 percent year-on-year decline. 
Major DPRK imports from India included organic chemicals, sugar, and 
zinc. 
 
RUSSIA 
------ 
 
¶13. (SBU) The DPRK's trade with Russia fell 31 percent to USD 110.5 
million in 2008, the third consecutive year of decline.  DPRK 
exports to Russia plummeted by 60 percent to USD 13.5 million. 
Major DPRK exports to Russia included electric equipment, machinery, 
and glass.  There was a notable increase in the DPRK's export of 
steel to Russia, which grew by 677 percent to USD 0.7 million. 
Russian exports to the DPRK declined by 23 percent to USD 97 
million.  Major DPRK imports from Russia included: minerals, pulp, 
used paper, and machinery.  Due to the DPRK's shortage of hard 
currency and rising oil prices, DPRK imports of refined Russian oil 
products fell from USD 70.2 million in 2007 to USD 26.4 million in 
2008, a 62.4 percent decline. 
 
BRAZIL 
------ 
 
¶14. (SBU) Trade between the DPRK and Brazil rose by 19.8 percent to 
USD 81 million.  DPRK exports to Brazil rose by 12.7 percent to USD 
38.3 million and consisted mostly of rubber, optical goods, medical 
devices, and inorganic chemicals.  DPRK imports from Brazil rose by 
27 percent to USD 42.5 million and consisted mostly of tobacco, 
mineral ore, seeds, fruits, organic chemicals, and wooden products. 
DPRK imports of Brazilian coffee increased by 1,893 percent to USD 
2.5 million. 
 
THAILAND 
--------- 
 
¶15. (SBU) The DPRK's trade with Thailand fell by 66.4 percent to USD 
76.8 million.  DPRK exports to Thailand fell by 20 percent to USD 29 
million, DPRK imports from Thailand fell by 75 percent to USD 47.8 
million.  DPRK grain imports from Thailand totaled 14,000 mt in 
2008, down from 250,000 mt of rice in 2007.  It should be noted that 
in 2007 50 percent of ROKG rice assistance to the DPRK was sourced 
in Thailand. 
 
GERMANY 
------- 
 
¶16. (SBU) In 2008, the DPRK's trade with Germany grew by 2.1 
percent, amounting to USD 52.4 million.  DPRK exports to Germany 
rose by 44.4 percent to USD 20.9 million.  DPRK imports from Germany 
fell by 14 percent to USD 31.5 million. 
 
UNITED STATES 
------------- 
 
¶17. (SBU) The DPRK's overall trade with the United States 
skyrocketed to USD 51.2 million, a 2,918 percent increase.  This 
significant rise in bilateral trade can be primarily attributed to 
USG food aid shipments to the DPRK as part of the humanitarian aid 
protocol that both countries agreed to in May of 2008.  The United 
States shipped USD 52.2 million worth of wheat, corn, and beans to 
the DPRK in 2008(143,330 mt). 
 
THE NETHERLANDS 
--------------- 
 
¶18. (SBU) The DPRK's trade with the Netherlands grew by 53.4 percent 
to USD 42.8 million.  DPRK exports to the Netherlands rose by 115 
percent to USD 26 million, while DPRK imports from the Netherlands 
rose by 6 percent to USD 16.8 million. 
 
-------------------------------- 
DPRK TRADE BY COUNTRY AND REGION 
-------------------------------- 
 
¶19. (SBU) The following is a breakdown of DPRK trade in 2008 by 
country and region: 
 
(USD 1,000, CHANGE IN PERCENT) 
 
        DPRK EXPORTS   DPRK IMPORTS    TOTAL     CHANGE 
 
ASIA &    1,871,633     3,208,364     5,079,997    18.9 
OCEANIA 
------- 
CHINA       754,046     2,033,233     2,787,279    41.2 
¶S. KOREA    932,250       888,117     1,820,367     1.2 
SINGAPORE       331       120,024       120,355   116.2 
INDIA        67,020        53,180       120,200    (4.9) 
THAILAND     28,998        47,772        76,770   (66.4) 
HONG KONG    31,710         8,604        40,314   129.1 
TAIWAN       13,214        15,578        28,792    15.5 
BANGLADESH   12,952         8,855        21,807     N/A 
MALAYSIA      1,657        17,543        19,200    113.5 
INDONESIA     7,950         6,957        14,907    380.0 
PAKISTAN     13,467           253        13,720    (13.1) 
JAPAN          -0-          7,664         7,664    (17.7) 
AUSTRALIA     6,342          -0-          6,342    (14.6) 
NEPAL         1,361           418         1,779      N/A 
SRI LANKA       116            99           215    (51.0) 
FIJI            181            29         210        N/A 
MONGOLIA         38            22          60        N/A 
LAOS            -0-           -0-          16        N/A 
 
EUROPE & 
CIS        94,328       192,988     287,316       (8.0) 
------- 
RUSSIA       13,519        97,005     110,524       (30.8) 
GERMANY      20,893        31,460      52,353         2.1 
NETHERLANDS  25,975        16,775      42,750        53.4 
ITALY         3,669         8,777      12,446        22.3 
UKRAINE       8,325         2,153      10,478        40.5 
BELGIUM       4,425         5,107       9,532       170.0 
FRANCE        1,144         6,733       7,877        68.3 
UK            6,021           379       6,400       (57.7) 
DENMARK         340         5,010       5,350       (29.1) 
POLAND          253         4,725       4,978       256.1 
SWITZERLAND     190         3,892       4,082        25.8 
SPAIN         1,704         1,966       3,670       (30.1) 
TURKEY        3,341           280       3,621    14,384.0 
AUSTRIA         215         2,886       3,101       (35.5) 
SLOVAKIA        400         1,824       2,224     2,865.3 
CZECH REPUBLIC  347         1,319       1,666     1,065.0 
GREECE        1,012           176       1,188        33.9 
SWEDEN           42           788         830       (37.2) 
SLOVENIA        300         494         794        (7.5) 
CROATIA         658          29         687        43.4 
KAZAKHSTAN      647           0         647       (59.1) 
ROMANIA         166         411         577       (18.2) 
BULGARIA        345         114         459        33.4 
HUNGARY         117         314         431       (84.9) 
FINLAND          42         364         406        45.0 
LUXEMBOURG      123           0         123         6.0 
LITHUANIA        71           0          71       (30.4) 
CYPRUS           34           0          34       (78.2) 
MALTA             2           7           9         NA 
ESTONIA           4           0           4       100.0 
IRELAND           4           0           4       (95.2) 
 
NORTH, SOUTH 
AMERICA      83,969     153,112     237,081       110.2 
------- 
BRAZIL       38,329      42,527      80,856        19.8 
USA             -0-      52,151      52,151     2,918.0 
CANADA          103      21,212      21,315        12.6 
COLOMBIA     15,510         817      16,327         N/A 
ARGENTINA     8,501       7,360      15,861         N/A 
COSTARICA     7,348       4,870      12,218         N/A 
MEXICO        7,233       3,061      10,294       (33.1) 
GUATEMALA       120       9,626       9,746         N/A 
CUBA          3,000       3,000       6,000         -0- 
CHILE           281       7,676       7,957         N/A 
PERU          2,680         330       3,010        (7.3) 
 
DOMINICA        864         482       1,346         N/A 
 
ME /AFRICA   12,533      19,131      31,664        (9.3) 
---------- 
SOUTH AFRICA  3,449      19,029      22,478        76.7 
LEBANON       7,612         -0-       7,612         N/A 
NIGERIA       1,440         -0-       1,440         N/A 
TANZANIA         32         102         134        318.8 
 
GRAND 
TOTAL     2,062,463   3,573,595   5,636,058         18.9 
 
NOTE:  The above list is incomplete and, due to insufficient data, 
does not include all of the DPRK's trading partners.  "NA" indicates 
that there were no recorded transactions in 2007. 
 
 
------------------------------- 
DPRK TRADE: EXPORTS AND IMPORTS 
------------------------------- 
 
Exports 
------- 
 
¶20. (SBU) DPRK exports totaled USD 1.1 billion in 2008, a 23 percent 
year-on-year increase.  This figure does not include inter-Korean 
trade.  Except for chemicals, plastics, and wooden products, most 
DPRK exports experienced positive growth in 2008.  The growth of 
DPRK exports can be primarily attributed to the high international 
price of raw materials, improved DPRK production facilities, 
improved supply of electricity, and favorable weather conditions. 
 
¶21. (SBU) Mineral products (iron ore and coal) were the DPRK's most 
important exports, accounting for 41.3 percent of total DPRK 
exports.  Since 2003, the DPRK has focused on exporting manufactured 
goods and has attempted to reinvigorate its light-industrial sector, 
but has failed to restructure its export sector or significantly 
boost its light industrial production.  DPRK exports of mineral 
products and non-ferrous metals totaled 58.1 percent of all DPRK 
exports in 2008.  Almost all (94.2 percent) of the DPRK's mineral 
products were exported to China in 2008.  Other major DPRK exports 
included textiles, chemicals, and plastics.  DPRK exports of 
precious metals skyrocketed to USD 35 million, a 1,499 percent 
year-on-year rise. 
 
¶22. (SBU) The following is a breakdown of DPRK exports in 2008 by 
product category.  The following data does not include inter-Korean 
trade. 
 
DPRK EXPORTS BY PRODUCT CATEGORY 
-------------------------------- 
(USD 1,000, GROWTH IN PERCENT) 
 
                          2007             2008 
DPRK EXPORTS        VALUE   SHARE    VALUE   SHARE   GROWTH 
------------        -----   -----    -----   -----   ------ 
MINERALS           349,581   38.0    466,544  41.3    33.5 
NON-FERROUS METALS 154,953   16.9    190,369  16.8    22.9 
GARMENTS           109,312   11.9    120,248  10.6    10.0 
MISCELLANEOUS       97,610   10.6     88,576   7.8    (9.3) 
CHEMICALS/PLASTICS  87,081    9.5     85,499   7.6    (1.8) 
MACHINERY/ELECTRIC/ 55,566    6.0     79,359   7.0     42.8 
ELECTRONICS 
ANIMAL PRODUCTS     30,430    3.3     40,743   3.6     33.9 
PRECIOUS METAL       2,191    0.2     35,023   3.1  1,498.5 
FRUIT AND VEGETABLE  11,498   1.3     15,877   1.4     38.1 
PRODUCTS 
WOOD PRODUCTS        20,549   2.2      7,975   0.7   (61.2) 
 
SUB-TOTAL           918,771  100.0  1,130,213 100.0   23.0 
(EXCLUDING INTER- 
KOREAN TRADE) 
 
TOTAL              1,684,117        2,062,463         22.5 
(INCLUDING INTER- 
KOREAN TRADE) 
 
SOURCE:  KOTRA AND MOU 
 
Imports 
------- 
¶23. (SBU) The DPRK's imports grew to USD 2.7 billion in 2008, a 32.8 
percent year-on-year increase.  This figure does not include 
inter-Korean trade.  Major DPRK imports included: minerals 
(including crude oil and refined petroleum products), textiles, 
electric equipment, machinery, animal fats, and processed food. 
DPRK textile imports rose by 76.4 percent in 2008.  DPRK textile 
imports came mostly from China, Netherlands, and Singapore.  This 
significant rise in textile imports is primarily due to the 
modernization of DPRK garment factories and the rise of 
Processing-on-Commission trade between the DPRK and China. 
¶24. (SBU) The following is a breakdown of major DPRK imports in 
2008: 
 
DPRK IMPORTS BY PRODUCT CATEGORY 
-------------------------------- 
(USD 1,000, PERCENT) 
                          2007              2008 
DPRK IMPORTS         VALUE  SHARE     VALUE  SHARE   GROWTH 
------------         -----  -----     -----  -----   ------ 
MINERALS/FUEL       491,350   24.3   694,839   25.9   41.4 
MISCELLANEOUS       174,163    8.6   322,638   12.0   85.3 
TEXTILES            180,755    8.9   318,848   11.9   76.4 
MACHINERY/ELECTRIC  242,414   12.0   309,246   11.5   27.6 
ELECTRONIC 
ANIMAL FATS/        148,033    7.3   236,613    8.8   59.8 
PROCESSED FOOD 
CHEMICALS           144,997    7.2   202,484    7.5   39.6 
NON-FERROUS METALS  138,796    6.9   176,729    6.6   27.3 
FRUIT AND VEGETABLE 195,887    9.7   155,733    5.8  (20.5) 
PRODUCTS 
PLASTICS            128,907    6.4   130,637    4.9    1.3 
VEHICLES            102,101    5.0    92,698    3.5   (9.2) 
ANIMAL PRODUCTS      74,903    3.7    46,013    1.7  (38.6) 
 
SUB-TOTAL         2,022,306  100.0 2,686,478  100.0   32.8 
(EXCLUDING INTER- 
KOREAN TRADE) 
 
TOTAL             3,054,856        3,573,595          17.0 
(INCLUDING INTER- 
KOREAN TRADE) 
 
SOURCE:  KOTRA 
 
 
------------------------ 
DPRK'S CRUDE OIL IMPORTS 
------------------------ 
¶25. (SBU) DPRK imports of Chinese crude oil rose by 1 percent to 
529,000 mt in 2008, up from 523,000 mt in 2007.  Due to rising 
international oil prices, the value of the DPRK's oil imports rose 
by 47 percent to USD 414 million in 2008, up from USD 282 million in 
¶2007. 
 
DPRK CRUDE OIL IMPORTS BY COUNTRY 
--------------------------------- 
(1,000 METRIC TONS) 
 
YEAR   CHINA THAILAND LIBYA YEMEN  IRAN  RUSSIA  SYRIA  TOTAL 
----   ----- -------- ----- -----  ----  ------ -----  ----- 
2000   389     ND      ND     ND   ND     ND     ND     389 
2001   579     ND      ND     ND   ND     ND     ND     579 
2002   472     ND      ND     ND   ND     125    ND     597 
2003   574     ND      ND     ND   ND     ND     ND     574 
2004   532     81      ND     ND   ND     ND     ND     613 
2005   523      0       0      0    0      0      0     523 
2006   524      0       0      0    0      0      0     524 
2007   523      0       0      0    0      0      0     523 
2008   529     ND      ND     ND   ND     ND     ND     529 
 
NOTE -- KOTRA does not provide full data for the DPRK's refined oil 
imports.  DPRK imports of refined oil products from Russia fell by 
62.4 percent to USD 26.4 million in 2008, down from 70.2 million in 
¶2007. 
-- "ND" indicates that, though trade may have taken place, data is 
insufficient. 
 
 
-------------------- 
DPRK'S GRAIN IMPORTS 
-------------------- 
 
¶26. (SBU) The ROK's Rural Development Administration estimates that 
the DPRK produced 4.31 million mt of grain and staple foods in 2008, 
a 7.6 percent increase from 4.01 million mt in 2007.  This increase 
can be attributed to drier weather conditions during the final 
months of the growing season, which in some years has been 
characterized by heavy rains.  Despite this increase, the DPRK 
needed an additional 600,000 mt to feed its population.  In the 
past, the ROKG sent an average of 400,000 - 500,000 mt of rice 
annually to the DPRK, but, due to a chilling of inter-Korean 
relations, no such shipments were made in 2008. 
 
¶27. (SBU) Total DPRK grain imports -- including those imported as 
humanitarian aid -- fell by 25.6 percent in 2008 to 282,000 mt. 
This decline is due to the DPRK's shortage of hard currency, rising 
world grain prices, and the Chinese government's food security 
policy.  (The Chinese government has implemented an export tariff on 
grain, introduced a grain export quota system, and employed a series 
of regulations meant to curb the exportation of Chinese grain.)  The 
DPRK's main sources of grain imports in 2008 were China with 119,000 
mt and Thailand with 14,000 mt. 
 
DPRK GRAIN IMPORTS BY COUNTRY 
----------------------------- 
(1,000 METRIC TONS) 
 
YEAR  CHINA  SYRIA THAILAND CANADA  JAPAN  EU  OTHERS TOTAL 
 
2000   283    ND     284     ND    106    40    512   1,225 
2001   436   -0-      ND     ND     50    22    437   1,400 
2002   219    ND     200     ND     ND    ND    586   1,005 
2003   349    ND      95     51     ND    10    304     809 
2004    90    ND     184     ND     ND     3    304     581 
2005   327    ND      10     14     ND    15    404     860 
2006     79    ND      2     ND     ND    ND     19     100 
2007    136    ND     212     1     ND    ND     30     379 
2008    119    ND      14    ND     20    ND    129     282 
 
NOTE: "OTHERS" includes donations through the World Food Program and 
non-governmental organizations.  "ND" indicates that, though trade 
may have taken place, data is insufficient. 
 
 
------- 
COMMENT 
------- 
 
¶28. (SBU) KOTRA has been compiling DPRK trade statistics for many 
years, but has gradually cut back on the number of staff involved in 
the effort.  KOTRA now has only two individuals, also members of the 
Chinese Business Corps, assigned to this task.  KOTRA relies almost 
entirely on its overseas offices to supply it with mirror image 
bilateral DPRK trade statistics based on host country customs data. 
Thus, the figures are rough and not fully reflective of the current 
state of DPRK trade.  Critics of the KOTRA data have particularly 
pointed to a lack of data on DPRK trade with Middle Eastern 
countries as a weak spot.  Other gaps in the analysis are unreported 
Sino-DPRK border trade and the DPRK's illicit trading activities. 
 
¶29. (SBU) Despite the uncertainties associated with DPRK trade and 
the imperfections of the KOTRA data, certain points are clear. 
Total DPRK foreign trade rose by 19 percent to USD 5.64 billion in 
2008, in spite of the global financial crisis and instability in 
world grain markets.  DPRK trade remained dependent on the 
production of primary goods and Sino-DPRK trade accounted for nearly 
50 percent of the DPRK's total foreign trade in 2008, up from 42 
percent in 2007.  While a number of factors contribute to this 
growing dominance of China in DPRK trade, it is increasingly evident 
that China holds the key to economic leverage over the DPRK.  The 
chilling of inter-Korean relations slowed the development of trade 
in 2008 and the ROK share of the DPRK's foreign trade fell from 38 
percent in 2007 to 32.3 percent.  Furthermore, inter-Korean trade 
through the first seven months of 2009 is lower in absolute terms 
than in 2008.  Lastly, DPRK foreign trade faces tougher external 
conditions in 2009 because of both the global economic slowdown and 
the UNSC sanctions imposed against the DPRK following the country's 
second nuclear test in May. 
 
TOKOLA