Export prices rise for second month in a row

Economy

Published: 15 Jul. 2020, 19:35

Export prices rise for second month in a row

Containers are stacked at the Sinseondae container terminal in the southern port city of Busan on July 1. Korea's exports went down on year due to the pandemic, but the reduction rate has declined on month in June. [YONHAP]

Export prices continued on an upward trend for the second month in a row in June, the first time since last year’s February-to-May period that export prices rose for more than two consecutive months.

According to the Bank of Korea (BOK) Wednesday, export prices went up by 0.3 percent in June compared to the previous month. However, compared to June 2019, they were 6.0 percent lower, maintaining a 13-month downward trend.

Export prices based on the contractual currency rose 1.6 percent on month and fell 8.5 percent on year. These figures factor out changes in the exchange rate.

The price of crude oil sourced from Dubai increased 33.9 percent on month in June, from $30.47 per barrel in May to $40.80 in June.

As the won rose against the dollar in June compared to May, export prices went down by 0.7 percent on month for semiconductors, which saw steady export prices in May. Export prices for computers, electronic and optical devices went down 1.7 percent, whereas the prices for industrial products went up by 0.3 percent along with the rise in coal and petroleum products.

“As the recovery of the semiconductor price has been interrupted, export prices in June increased on month following the rise in the price of crude oil for two months straight. The rate of the fall from last year’s value has slowed down,” said a Bank of Korea spokesperson. “The export price for semiconductors went down by 0.7 percent in June and is on a two-month monthly decline, but the on-year negative slope is continuing to get smaller.”

Import prices in June also rose by 2.5 percent on month due to the influence of crude oil price increases. Compared to last June, prices went down by 7.3 percent, maintaining the downward trend that has lasted for five months.

Import prices for raw materials went up by 9.9 percent on month. Import prices for intermediate goods, mostly driven by coal and petroleum, went up by 0.9 percent. Meanwhile, import prices for capital goods like machinery dropped 0.6 percent, and those for consumer goods decreased by 0.8 percent on month.

“Import prices are heavily affected by the price of crude oil, and hence they showed a consecutive two-month upward trend,” said the BOK spokesperson. “After some time passes, it is going to have a similar effect on consumer prices.”

BY JEONG HYE-JEONG, LEE JEE-YOUNG [lee.jeeyoung1@joongang.co.kr]