▲ A gas station in Seoul
The import price index rose for the first time in four months last month as a sharp surge in international oil prices outweighed a drop in the won-dollar exchange rate.
According to the Export and Import Price Index statistics released by the Bank of Korea (BOK) today (October 16), the import price index (based on the Korean won, preliminary, 2020=100) stood at 159.37 for September, up 1.7% from 156.68 in August.
After dropping 4.2% in June, the import price index had declined for three consecutive months, falling 1.0% in July and 2.2% in August, before reversing direction last month.
By category, raw materials rose 9.6% from the previous month, led by mineral products amid higher crude oil prices.
Intermediate goods fell 1.7% from the previous month.
While coal and petroleum products rose 1.5%, primary metal products declined 2.8%.
Capital goods and consumer goods fell 2.4% and 2.3% from the previous month, respectively.
Compared to the same month last year, the import price index increased by 17.6%.
Although the upward pace has narrowed since surging 25.4% last May, double-digit growth continues.
The average exchange rate last month was 1,359.0 won per dollar, down 3.4% from 1,406.3 won the previous month.
On the other hand, the monthly average price of Dubai crude over the same period jumped 28.1% from $88.75 to $113.71 per barrel.
Excluding the exchange rate effect, import prices based on contract currency in September rose 4.9% from the previous month and 20.6% from the same month last year.
Lee Heung-hoo, head of the Price Statistics Team at the BOK, stated, "The exchange rate and international oil prices dropped through mid-October compared to the previous month, which is expected to act as a downward factor on this month's import prices." He added, "However, regarding international oil prices, uncertainties surrounding developments in the Middle East conflict remain high."
The export price index for September stood at 182.29, down 0.8% from 183.67 in the previous month.
While coal and petroleum products rose due to higher international oil prices, most items declined due to the falling exchange rate, marking the second consecutive month of decline.
The export price index had risen for 11 consecutive months before falling 0.1% in June.
It rebounded 0.9% in July, but has resumed a downward trend since August.
By category, manufactured products fell 0.8%.
Although coal and petroleum products rose 8.5% due to higher oil prices, export prices for most items dropped from the previous month, with transportation equipment falling 3.2% due to the weaker exchange rate.
Agricultural, forestry, and marine products fell 0.3% from the previous month.
Export prices based on contract currency rose 2.6% from the previous month and 44.5% from the same month last year.
Lee Heung-hoo, head of the BOK Price Statistics Team, explained, "The rise in international oil prices affects both export and import prices, but looking at the component items, import prices are affected to a greater extent because mineral products, which include crude oil, carry a heavier weight."
For the September trade index (in US dollars), the export volume index stood at 181.31, up 32.1% from a year earlier.
Computers, electronic and optical products, and machinery and equipment increased.
The export volume index extended its upward streak to 11 consecutive months, marking the largest increase in 16 years and 8 months since January 2010.
The export value index surged 89.2%.
The import volume index also rose 11.1%, boosted by increases in computers, electronic and optical products, and machinery and equipment.
The import value index increased by 26.9%.
The net terms of trade index for September rose 25.4% from a year earlier.
The net terms of trade index is the ratio of the unit price of export goods to the unit price of import goods, serving as an indicator to gauge how many goods South Korea can import with a single unit of export.
The income terms of trade index came in at 216.70, soaring 65.6% as both the net terms of trade index (25.4%) and the export volume index (32.1%) increased.
Following a 59.9% rise in August, this marks the highest growth rate on record for the second consecutive month.
(Photo: Provided by Bank of Korea, Yonhap News)
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