[Asia Economy Reporter Seo So-jeong] Due to the rise in raw material prices, import prices surged more than export prices, causing the net barter terms of trade index to hit its lowest level since statistics began.
According to the 'April Trade Index and Terms of Trade' (based on USD) released by the Bank of Korea on the 27th, the import value index last month was 168.63 (2015=100), up 19.4% compared to the same month last year. This marks 17 consecutive months of increase since December 2020 (2.9%), but the rate of increase (19.4%) was lower than in March (28.3%).
By item, the import value index for mining products rose by 69.6%, and among manufactured goods, coal and petroleum products (42.5%), chemical products (15.2%), and computers, electronics, and optical devices (11.9%) also increased.
On the other hand, the import quantity index fell 5.2% year-on-year to 121.33, marking a decline for the first time in 20 months. This was due to decreases in imports of machinery and equipment (-21.2%), primary metal products (-17.7%), and coal and petroleum products (-11.8%).
Son Jin-sik, head of the price statistics team at the Bank of Korea, explained, "The rise in international oil prices and raw material prices caused the import value index to increase," and added, "The import quantity index declined for the first time in 20 months due to decreases in semiconductor and coal and petroleum product imports."
Son said, "The average price of Dubai crude oil until May 25 was $106.90 per barrel, up 3.97% from the previous month and 61.14% year-on-year, showing a smaller increase than in April but still remaining high," and added, "It remains to be seen whether the import value index will continue to rise in May."
The export value index for April (140.75) rose 14% year-on-year, marking 18 consecutive months of increase, and the export quantity index (120.88) also rose 1.9% compared to a year ago, maintaining an upward trend for seven consecutive months. Among individual items, export values of coal and petroleum products (71.0%) and primary metal products (20.9%) increased significantly.
The net barter terms of trade index, which is the ratio of the unit price of export goods to the unit price of import goods, stood at 83.78, down 11.1% from a year earlier, continuing a decline for 13 consecutive months. This is the lowest level since related statistics began being compiled in 1988. This is because import prices (+25.9%) rose much more than export prices (+11.9%).
The income terms of trade index fell 9.4% year-on-year for three consecutive months, as the export quantity index rose (1.9%) but the net barter terms of trade index declined (-11.1%). Son said, "Due to the rise in oil prices, import prices increased significantly while export prices rose less, causing the net barter terms of trade index to hit an all-time low."
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