Ships and chips cause trade volume to recede

Korea’s trade volume for April shrank from a year earlier for the second straight month, mainly due to a drop in overseas delivery of ships and semiconductors and weak local demand for commodities, a government report showed yesterday.

Despite the contraction in trade volume, the country’s trade balance remained in the black for the third straight month to the tune of $2.15 billion, according to the report by the Ministry of Knowledge Economy.

Exports reached $46.26 billion in April, down 4.7 percent on-year, with imports dipping 0.2 percent to $44.11 billion, the monthly report said.

The country exported $2.10 billion worth of goods a day on average.

Last month’s positive trade balance is smaller than the $2.44 billion surplus tallied for March, when the country shipped $47.38 billion worth of goods and imported $44.93 billion.

March marked the first time since October 2009 that the country’s exports and imports contracted simultaneously from a year earlier.

The ministry in charge of the country’s industrial policies and trade promotion said weak demand for ships, semiconductors and petrochemicals, along with a slight reduction in working days, contributed to the negative growth in April.

Exports of ships nosedived 21.7 percent on-year, with semiconductors and petrochemicals falling 8.3 percent and 4.9 percent, respectively.

Overseas shipments of wireless telecom products contracted 37.1 percent, while exports of cars, general machinery and automobile parts moved up.

The ministry added that because people took a full day off for the parliamentary elections, the total number of working days fell from a year earlier.

Another factor that affected on-year export data last month was the 23.5 percent on-year surge in outbound shipments, which took the number to $48.54 billion in April 2011. That was the second highest monthly tally and caused a “high” base effect that adversely hurt last month’s numbers.

On imports, the report showed local companies cutting back on purchasing various commodities such as steel products and consumer goods.

Imports of crude oil and natural gas, however, increased 5.3 percent and 43.6 percent, respectively, from April 2011.

The latest report showed exports to the Middle East and the Commonwealth of Independent States jumped 34.9 percent and 24.5 percent on-year, respectively, with gains of 5.6 percent for the United States and 4.0 percent for Southeast Asian nations. Outbound shipments to China, Korea’s No.1 overseas market, were up 1.7 percent, while numbers contracted for Japan and members of the European Union.

The ministry said that in the first four months of this year Korea’s exports reached $181.19 billion, for a gain of 0.9 percent from a year earlier, while imports increased 5.5 percent to $177.37 billion for a combined trade surplus of around $3.8 billion.

In the future, it added, local companies need to take greater advantage of the free trade pacts Korea has with such countries and regions as the United States and the European Union.

It also needs to respond quickly to developments taking place in China, which is focusing more on building up its domestic economy, it said.

Yonhap