July Import Prices Rise 0.4% Due to International Oil Price Increase
BOK Announces July Export and Import Price Indexes
As geopolitical risks in the Middle East increase and international oil prices rise, domestic import prices have also increased for two consecutive months. Import prices are a key price indicator that can affect consumer prices with a time lag.
According to the "July Export and Import Price Index and Trade Index (Provisional)" released by the Bank of Korea on the 13th, import prices in July rose 0.4% compared to the previous month. Following a 0.7% increase in June, this marks two consecutive months of growth.
Import prices were influenced by the rise in international oil prices due to heightened geopolitical risks surrounding Israel in the Middle East. The average Dubai crude oil price in July was $83.83 per barrel, up about 1.5% from the previous month.
By item, coal and petroleum products rose 0.8%, and mineral products increased 0.6% due to the rise in international oil prices. Computer, electronic, and optical equipment also rose 0.9% due to semiconductor price increases.
Lee Moon-hee, head of the Price Statistics Team at the Economic Statistics Bureau of the Bank of Korea, said, "The rise in international oil prices due to geopolitical risks in the Middle East continued to drive the increase in import prices," adding, "The rise in international semiconductor prices also affected the increase in import prices."
Export prices also rose 0.7% month-on-month last month, influenced by the rise in the won-dollar exchange rate. The average won-dollar exchange rate last month was 1,383.38 won, up 0.2% from the previous month.
By item, computer, electronic, and optical equipment rose 2.1%, and electrical equipment increased 1.2%. Coal and petroleum products also rose 0.9%.
Excluding the exchange rate effect, import prices rose 0.2% and export prices rose 0.4% month-on-month on a contract currency basis.
The export volume index last month rose 9.1% year-on-year, driven by increases in computer, electronic, and optical equipment, as well as coal and petroleum products. The export value index also rose 14.9%.
The import volume index rose 5.3% year-on-year due to increases in mineral products, coal, and petroleum products, and the import value index rose 8.2%.
The July net barter terms of trade index rose 2.5% year-on-year as export prices (5.2%) increased more than import prices (2.7%). The net barter terms of trade index measures the quantity of goods that can be imported with one unit of export revenue.
During the same period, the income terms of trade index rose 11.8% year-on-year as both the export volume index and net barter terms of trade index increased. The income terms of trade index measures the quantity of goods that can be imported with total export revenue.
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