Biggest fall in Korean exports since Aug. 2009

Korea’s exports in October saw the year’s largest drop in major products, the Ministry of Trade, Industry and Energy said Sunday.

Last month exports declined 15.8 percent compared to a year earlier to hit $43.5 billion.

This is the largest decline in six years. In August 2009, after the global financial meltdown, monthly exports declined 20.9 percent year-on-year.

Worries are growing after the volume of exports fell in October, not just the dollar value. In previous months, exports shrank due to falling per-unit prices as oil and other raw material prices became cheaper.

According to the Trade Ministry, the volume of overseas shipments shrank by 9.4 percent year-on-year in October. This also was the largest drop this year.

Mobile phones were the only major export item that saw shipments increase, by 42.1 percent in dollar terms year-on-year, thanks to newly released smartphones like the Samsung Galaxy Note 5 and S6 edge, as well as LG’s V10.

Most major products including semiconductors, steel, ships, home appliances, automobile, oil and petrochemicals, plunged.

Ship exports plunged by 63.7 percent year-on-year, the largest fall among the nation’s 13 major export products, mainly due to no offshore plants being delivered. Other products like oil faced a fall of 44.9 percent year-on-year, petrochemicals by 31.6 percent and steel by 29.6 percent.

Exports shrank to Korea’s largest trade partners, falling 8 percent year on year to China, 11.4 percent to the United States and 12.5 percent to the EU.

Imports fell by 16.6 percent year-on-year to $36.8 billion in October. Some analysts worry that the nation’s trade balance may soon turn from surplus to deficit. Much of the fall came from reduced imports of raw materials like steel, coal, gas and crude oil, the ministry said.

“November’s performance won’t be as bad as this because several offshore plants will be delivered,” said an official of the Trade Ministry.

The government and business leaders believe that ratifying the Korea-China Free-Trade Agreement (FTA) may be a short-term solution to boost sagging exports. The government also said it will expand relationships with new markets like Iran.

BY KIM JI-YOON [kim.jiyoon@joongang.co.kr]