Export prices fell in August. The decline came as the won–dollar exchange rate plunged over the month, despite a 15.6% rise in international oil prices.
According to export and import price index statistics released by the Bank of Korea (BOK) on the 15th, the export price index stood at 183.23 in August. It fell 3.7% from the previous month, marking the sharpest decline since a 6.1% drop in December 2022.
The exchange rate was the biggest factor behind the decline. The average won–dollar exchange rate fell 6.1%, from 1,497.4 won in July to 1,406.3 won in August. Over the same period, Dubai crude prices rose 15.6%, from $76.75 to $88.75 per barrel. Rising international oil prices generally push up export prices, particularly for petroleum-related products. In fact, export prices for coal and petroleum products rose 0.3% in August from the previous month. However, the impact of the falling exchange rate was greater when prices were converted into won, causing overall export prices to decline.
Products heavily affected by exchange-rate movements posted relatively large declines. Export prices for chemical products fell 5.3%, while those for transport equipment and computers, electronics and optical equipment dropped 5.4% and 3.1%, respectively. Export prices for manufactured goods declined 3.7% overall.
Excluding the exchange-rate effect, export prices followed a different trend. Export prices measured in contract currencies rose 2.2%. Semiconductor export prices fell when measured in won, but increased when measured in contract currencies after exchange-rate fluctuations were excluded.
Import prices fell for the third consecutive month. The import price index stood at 156.31 in August, down 2.4% from the previous month. Import prices for intermediate goods fell 4.0%, with chemical products down 6.1% and primary metal products down 4.2%. Capital goods and consumer goods also declined by 4.2% and 4.4%, respectively. Raw material prices, however, rose 1.5%, driven by a 2.1% increase in the prices of mining products such as crude oil. Import prices remained 15.6% higher than a year earlier. The rate of increase, however, has continued to slow after reaching 25.4% in May.
The BOK expects the year-on-year increase in import prices to remain in the double digits in September, as international oil prices have risen recently.
The export volume index rose 25.9% year on year to 153.48 in August. It has increased for 10 consecutive months since November last year, led by computers, electronics and optical equipment, as well as chemical products. Import volumes rose 12%, meaning export volumes grew more than import volumes.
The net barter terms-of-trade index rose 27.1% year on year to 119.9, the largest increase since statistics began in 1988. The index level was also the highest in 19 years and four months, since April 2007. The income terms-of-trade index, which also reflects export volumes, rose 60.0% year on year to 184.02. This was likewise the largest increase since statistics began. The net barter terms of trade measure the price relationship between exported and imported goods, while the income terms of trade also incorporate export volumes to show the actual purchasing power available for imports.
Kim Se-hyung, Reporter fax123@sportschosun.com
This article has been translated by GripLabs Mingo AI.
