Holidays hamper trade surplus
The reduction was attributed to fewer working because of two national holidays at the beginning of the month, with many businesses giving their workers an additional day off.
Shrinking shipments to China and Asean countries, Korea’s two largest export markets, was another reason for the drop.
The Ministry of Trade, Industry and Energy predicted exports will continue to be strong as the economies of the United States and European Union countries - Korea’s third and fourth largest export markets - recover.
“The government plans a series of solutions to expand exports to China, taking note of changes in the country’s slower import market,” the ministry wrote in a statement released yesterday.
Exports to China in May shrank 9.4 percent compared to the same month last year, and exports to Asean countries shrank 2 percent.
Exports of petroleum products to China plunged 56 percent year-on-year while LCD devices dropped 12 percent.
While export growth to the United States and European Union in May slowed compared to April, it was still enough to offset the declines in Asia
Shipments to the United States rose 4.5 percent year-on-year in May, and exports to the European Union jumped 32 percent. Leading categories of items sent to the United States were cars, petroleum products and steel.
Ships, personal computers and petroleum products showed the largest year-on-year increases. Value-added drilling and production vessels valued at $3.6 billion were reported, an increase of 30 percent compared to May last year.
Korea exported $690 million in desk-top computers, up 13.6 percent, after Microsoft ended support for Windows XP.
Overall exports of cars, memory chips, LCD screens and mobile handsets declined.
Korean holidays in May reduced typical auto production by two days, and resulted in a 0.5 percent decline in auto exports to $4.1 billion.
Exports of LCD displays were $2.1 billion, 6 percent less than in May 2013, due to price competition with other manufacturers.
Overseas sales of Korean smartphones shrank 10 percent to $2.4 billion, largely due to an increasing inventory in Chinese and European markets.
Imports increased 0.3 percent compared to the same month last year to $42.5 billion.
Consumer products, in particular foreign cars (up 51.8 percent), accounted for the biggest share of the increase, offsetting a decline in raw materials.
BY KIM JI-YOON [firstname.lastname@example.org]