August Import Prices Down 0.9%... Falling for Two Consecutive Months but Rising 'Hwan-yul' Sparks Concern

A citizen is refueling at a gas station in downtown Seoul. [Image source=Yonhap News]

Recently, international oil prices have stalled, resulting in the import price index declining for two consecutive months. However, compared to last year, it has risen by more than 20%, maintaining a high level.

According to the Bank of Korea on the 16th, the import price index for August (provisional figure based on the Korean won, 2015 level 100) was 149.45, down 0.9% from the previous month. This marks a decline for two consecutive months following July's -2.6%.

Capital goods (1.1%) and consumer goods (0.4%) increased, but prices of mining products, coal, and petroleum products fell due to the decline in international oil prices. The average monthly price of Dubai crude oil dropped 6.3%, from $103.14 per barrel in July to $96.63 last month.

By item, golf equipment (7.9%), medium-to-large computers (6.6%), cranes for handling goods (7.2%), and refined aluminum products (3.3%) rose, while slaughter by-products (-11.0%), acrylic acid (-12.6%), and propane gas (-6.8%) declined.

The export price index last month was 128.17, also down 0.9% from the previous month, marking a decline for two consecutive months following July's -2.5%.

Agricultural, forestry, and fishery products rose 2.2% month-on-month, and among manufactured goods, transportation equipment and machinery and equipment also increased. However, coal and petroleum products, chemical products, computers, electronics, and optical devices declined, lowering the export price index.

By item, jet fuel (-9.6%), gasoline (-6.6%), diesel (-1.6%), caustic soda (-9.6%), and stainless steel heavy plates (-19.4%) saw significant decreases.

However, both import and export prices remain at high levels compared to last year. The import price index rose 22.9% compared to the same month last year, marking 18 consecutive months of increase, and the export price index rose 13.4%, marking 19 consecutive months of increase.

Recently, the won-dollar exchange rate has risen sharply, suggesting the possibility of further increases in the import price index. The exchange rate reached 1,397.9 won intraday the previous day, setting a new two-day consecutive high. This is significantly higher compared to last month's average won-dollar exchange rate of 1,318.44 won.