Trade surplus plummets on-year to $4.29 billion

Korea’s trade surplus shrank sharply from a year earlier in October as import growth outpaced export gains, the government said yesterday.

The country’s trade surplus reached $4.29 billion last month, down from $6.34 billion a year earlier, according to the Ministry of Knowledge Economy. Last month’s figure, however, was larger than the $1.55 billion surplus tallied in September.

The ministry said exports grew 9.3 percent from a year earlier to $47.4 billion while imports gained 16.4 percent to $43.1 billion.

“The modest export growth set against robust import gains can be attributed to [several factors including] one fewer working day compared to the year before, a surge in overseas demand for local products in October 2010 and a drop in the delivery of ships made from local yards,” Han Jin-hyun, the head of the ministry’s trade-investment policy office, said during a press briefing.

Outbound shipments of petroleum products, automobiles, steel and petrochemicals grew by double digits, while shipments of liquid crystal devices, semiconductors, ships and mobile communications equipment contracted from last year, he said.

Exports of refined petroleum products fueled in part by a rise in demand from Japan reached $3.99 billion, with automobiles and car assembly parts reaching $4.03 billion and $2.13 billion, respectively.

Shipments to the Commonwealth of Independent States in Central Asia soared 24.4 percent from a year earlier, while exports to the Association of Southeast Asian Nations rose 25 percent, although exports to developed economies, with the exception of Japan, decreased.

Outbound shipments to the U.S. and European Union were down 7.0 percent and 20.4 percent, respectively, last month.

“Exports to Japan surged 25.3 percent with the gains probably related to the March 11 earthquake there that hurt the country’s production capabilities,” the official said.

Meanwhile, Han said the drop in the country’s surplus was fueled by surging crude oil, natural gas and coal prices. Inbound shipments of crude oil jumped 52.7 percent on-year. The increase in energy imports comes amid a drop in domestic demand for foreign capital and consumer goods.

From January to October, exports grew 21.4 percent to $462.63 billion and imports posted gains of 25.9 percent to stand at $436.15 billion for a trade surplus of just over $26.48 billion.

The ministry, which is in charge of trade promotion, said that at the present pace, two-way trade will pass $1 trillion for the first time next month.

Yonhap