July Import Prices Rise After Three Months... Impact of Rising International Oil Prices

Import Price Index Up 0.4% · Export Price Index Also Up 0.1%

Last month, export and import prices turned upward for the first time in three months due to the rise in international oil prices. Since import prices are reflected in consumer prices with about a one-month lag, they are expected to act as an upward factor for inflation going forward.

According to the "July Export and Import Price Index" released by the Bank of Korea on the 17th, the export price index (based on the Korean won) rose by 0.1% compared to the previous month.

The export price index turned downward in May and continued to decline in June, but rose in July for the first time in three months. Compared to the same month last year, it fell by 12.8%, maintaining a downward trend.

By item, agricultural, forestry, and fishery products rose 1.7% compared to the previous month. Manufactured goods such as computers, electronics, and optical equipment (-1.3%) and primary metal products (-1.2%) declined, but coal and petroleum products (7.0%) increased, resulting in a 0.1% rise from the previous month.

Yoo Sung-wook, head of the Price Statistics Team at the Bank of Korea's Economic Statistics Bureau, explained, "In July, export prices rose 0.1% from the previous month as the won-dollar exchange rate fell, and while computers, electronics, and optical equipment declined, petroleum products increased due to rising oil prices. Compared to the same month last year, prices fell as petroleum product prices dropped and IT products, centered on semiconductors, also declined."

The export price based on contract currency, which limits the exchange rate effect, rose 0.8% from the previous month. The average won-dollar exchange rate last month was 1,286.30 won, down 0.8% from the previous month (1,296.71 won).

The import price index (based on the Korean won) rose 0.4% from the previous month, also increasing for the first time in three months. Although primary metal products declined, mining products and coal and petroleum products rose due to the impact of rising international oil prices. Compared to the same month last year, it fell 13.5%, continuing the downward trend.

The monthly average price of Dubai crude oil rose 7.3% from $74.99 per barrel in June to $80.45 last month. Compared to the same month last year, it fell 22%.

Raw materials, centered on mining products, rose 3.1% from the previous month, while intermediate goods fell 1.1% from the previous month as coal and petroleum products (1.3%) rose but primary metal products (-2.8%) and chemical products (-1.6%) declined.

Capital goods and consumer goods fell 0.3% and 0.5%, respectively, compared to the previous month.

The import price based on contract currency, which limits the exchange rate effect, rose 1.1% from the previous month.

Team leader Yoo said, "With import prices rising in July, there will be some impact on consumer prices in August or the following month. However, since it is difficult to predict the direction of international oil prices, it is hard to forecast whether import prices will continue to rise after August."