Trade terms have been improving for eight consecutive months due to improved semiconductor exports and a decline in natural gas prices.
According to the "January 2024 Trade Index and Terms of Trade (Provisional)" released by the Bank of Korea on the 28th, the income terms of trade index last month rose 20.8% compared to the same month last year.
The income terms of trade index represents the total quantity of goods that can be imported with the total export value of South Korea. This index has been on an upward trend for eight months since June last year.
The net barter terms of trade index, which indicates the quantity of goods that can be imported per unit of export, has also been increasing for eight consecutive months since June last year.
The export volume index in January rose 17.1% year-on-year, driven by increases in computers, electronic and optical equipment (26.9%), and transport equipment (18.3%). This marks five consecutive months of growth since September last year.
The export value index increased 15.7% year-on-year, with growth in computers, electronic and optical equipment (30.6%) and transport equipment (21.4%). This is the fourth consecutive month of increase since October last year.
The import volume index fell 3.9% year-on-year as coal and petroleum products (15.4%) and machinery and equipment (8.4%) increased, but mining products (-7.4%) and chemical products (-10.1%) decreased.
The import value index also declined 7.9% year-on-year, with increases in coal and petroleum products (14.4%) and machinery and equipment (5.3%), but decreases in mining products (-14.8%) and chemical products (-15.9%).
Yuseong Wook, head of the Price Statistics Team at the Bank of Korea's Economic Statistics Bureau, explained, "The turnaround in semiconductor prices and the decline in natural gas prices combined to reduce the drop in export prices, while import prices remained at last year's levels."
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