▲ A gas station at the Mannam-ui Gwangjang rest area in Seocho-gu, Seoul, on the 14th.
Import prices fell by the largest margin in three and a half years last month as international oil prices, which had surged due to the war in the Middle East, declined.
Export prices also saw their upward trend halt for the first time in a year, as prices for petroleum products dropped and the growth in semiconductor prices slowed.
According to the export and import price index statistics released by the Bank of Korea today, the import price index for June (tentative, based on the Korean won, 2020=100) stood at 161.34, down 4.4% from May (168.78).
The import price index had previously fallen by 2.1% in April, marking its first decline in 10 months, before rebounding slightly in May (+0.2%) and falling again after one month.
The decline in the June index was the largest in three years and six months since December 2022 (-6.5%).
By category, coal and petroleum products (-19.0%) among intermediate goods and mining products (-11.3%) among raw materials saw significant drops.
Among specific items, crude oil (-20.7%), naphtha (-25.5%), and bunker-C oil (-19.2%) led the decline in import prices.
Lee Moon-hee, head of the Price Statistics Team at the Bank of Korea, explained, "Despite the rise in the won-dollar exchange rate in June, import prices fell compared to the previous month due to the decline in international oil prices, which lowered the costs of mining products, coal, and petroleum products."
In fact, the price of Dubai crude fell 23.0% from an average of 103.15 dollars per barrel in May to 79.45 dollars in June.
Regarding the price outlook, Lee said, "Although the average price of Dubai crude in July has fallen below the average level of February, which was before the war, it is difficult to make predictions as geopolitical tensions in the Middle East have recently re-emerged and the monthly average exchange rate has risen slightly compared to June."
He added, "As the decline in import prices for raw materials and intermediate goods compared to the previous month is reflected in consumer goods prices, the burden on consumer prices is expected to ease somewhat with a time lag."
The export price index for June (based on the Korean won) was 188.90, the same level as the previous month.
This marks the end of an 11-month consecutive rise that had continued through May, halting the upward trend for the first time in a year.
While prices for computers, electronic and optical equipment, including semiconductors, continued to rise, the overall index remained flat as prices for coal and petroleum products fell significantly due to lower oil prices.
By category, export prices for coal and petroleum products among manufactured goods fell by 13.9%, with specific items such as diesel (-15.6%), jet fuel (-18.2%), and ethylene (-19.9%) showing sharp declines.
Export prices for computers, electronic and optical equipment, including semiconductors, rose 4.5% from the previous month, but the growth rate slowed compared to April (16.9%) and May (5.4%).
The growth in prices for DRAM (3.1%) and flash memory (11.7%) also slowed compared to the previous month.
Regarding this, Lee explained, "It appears that the growth in semiconductor prices slowed in May and June as quarterly semiconductor supply contracts were mainly concluded in April," and forecasted, "Since excess demand for semiconductors continues, price fluctuations may occur again when contracts are renewed in the third quarter."
In June, the trade index (based on the US dollar) showed that the export volume index was 163.44, up 29.8% from the same month last year, marking the largest increase in 16 years and 5 months since January 2010 (+42.0%).
The export value index (242.98) also rose 74.8% during the same period, recording the highest growth rate since statistics were first compiled in 1988.
This is the result of a significant increase in the export volume index (40.0%) and value index (172.4%) for computers, electronic and optical equipment, driven by the continued semiconductor export boom.
For imports, the volume index (126.3) and value index (169.63) rose by 12.0% and 30.5%, respectively, compared to the same month last year.
The net terms-of-trade index (110.69) rose 15.6% compared to the same month last year.
This is the result of export prices (34.7%) rising more sharply than import prices (16.5%) during the same period.
The net terms-of-trade index is the ratio of the price of one unit of export goods to the price of one unit of import goods, and is an indicator that gauges how many goods South Korea can import with one unit of exports.
The income terms-of-trade index (180.91) rose 50.0% compared to the same month last year, as both the net terms-of-trade index and the export volume index increased.
(Photo: Yonhap News)
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