As Oil Prices Rise, Import Prices Increase for Three Consecutive Months... Concerns Over Consumer Price Inflation

March Import and Export Prices Both Rise 0.4%
Influenced by Slight Exchange Rate Decline and International Oil Price Increase

Due to the rise in international oil prices, import prices have increased for three consecutive months. Since import prices affect domestic consumer prices with a time lag, concerns about future inflation are expected to grow.

According to the "March 2024 Export and Import Price Index (Provisional)" released by the Bank of Korea on the 16th, import prices last month rose by 0.4% compared to the previous month. Import prices have been on the rise for three months in a row, following January (2.5%) and February (1.0%).

The upward trend in import prices was driven by international oil prices. The average price of Dubai crude oil increased by 4.1% from $80.88 per barrel in February to $84.18 in March.

Looking at import prices by item, mining products such as crude oil and copper ore rose by 1.0% compared to the previous month, and coal and petroleum products also increased by 1.0%. Primary metal products such as copper refined products and aluminum refined products rose by 0.7%.

Yuseong Wook, head of the Price Statistics Team at the Bank of Korea’s Economic Statistics Bureau, explained, "Import prices rose due to increases in mining products, coal, and petroleum products influenced by the rise in international oil prices."

On the other hand, the won-dollar exchange rate slightly declined in March, reducing the extent of price increases. The average won-dollar exchange rate fell by 0.1% from 1,331.74 won in February to 1,330.7 won in March.

Last month’s export price index also rose by 0.4% compared to the previous month, driven by increases in chemical products, computers, electronics, and optical devices. The export price index has shown an upward trend for three consecutive months since January (3.1%) and February (1.6%).

By item, chemical products rose by 1.1% compared to the previous month, and computers, electronics, and optical devices such as DRAM and flash memory increased by 0.9%. The rise in chemical products along with the continued increase in semiconductor prices pushed export prices higher.

Excluding the exchange rate effect, import prices based on contract currency rose by 0.5% in March compared to the previous month, and export prices also increased by 0.5% compared to the previous month.

Meanwhile, compared to the same month last year, the import price index fell by 0.7%, while the export price index rose by 2.6%.