May Export Price Index Down 1.3% · Import Price Index Down 2.8%
International oil prices fell, causing the export-import price index to decline for the first time in four months last month. Since import prices are reflected in consumer prices with about a one-month lag, this is expected to act as a downward factor for consumer prices.
According to the Bank of Korea on the 14th, the export price index (based on the Korean won) in May fell 1.3% compared to the previous month. The export price index had risen for three consecutive months since February but turned downward last month. Although the won-dollar exchange rate increased, the decline in coal, petroleum products, and chemical products influenced the drop.
Compared to the same month last year, it fell 11.2%, marking the largest decline in 13 years and 2 months since March 2010 (-11.3%).
The export price based on contract currency, which limits the exchange rate effect, fell 1.8% from the previous month. The average won-dollar exchange rate last month was 1,328.21 won, a 0.6% increase from the previous month (1,320.01 won).
Agricultural, forestry, and fishery products rose 1.3% compared to the previous month. Manufactured goods saw a 1.3% decline from the previous month as coal, petroleum products (-7.7%), and chemical products (-2.4%) fell, despite increases in computers, electronics, and optical equipment.
The import price index (based on the Korean won) fell 2.8% from the previous month, also declining for the first time in four months. Although the won-dollar exchange rate rose, the drop in international oil prices caused minerals and other items to fall. The monthly average price of Dubai crude oil dropped 10.2% from $83.44 per barrel in April to $74.96 last month. Compared to the same month last year, it fell 30.7%.
The import price based on contract currency, which limits the exchange rate effect, fell 3.2% from the previous month.
Raw materials, centered on minerals, fell 6.3% from the previous month, and intermediate goods, including coal, petroleum products, and chemical products, fell 1.6% from the previous month.
Capital goods and consumer goods rose 0.1% and 0.3%, respectively, compared to the previous month.
Seo Jeong-seok, head of the price statistics team at the Bank of Korea, explained, "The fact that import prices fell more than export prices can be a factor for improving terms of trade. In particular, the slowdown in the price decline in the semiconductor sector will have a positive impact on the current account."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
