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Exports grew in January, but so did trade deficit

Published: 02 Feb. 2022, 16:11

Containers pile up at the Gamman dock in Busan on Jan. 25. Korea reported record-high January exports despite the spread of Omicron and rising raw material prices, the Ministry of Trade, Industry and Energy said Tuesday. [YONHAP]

Despite the spread of Omicron and rising raw material prices, Korea reported record-high exports for January, but also its second consecutive monthly trade deficit due to soaring energy costs.

The Ministry of Trade, Industry and Energy said Tuesday that January exports were $55.3 billion, 15.2 percent higher than a year earlier and a record for a January. It was the first time exports in January surpassed $50 billion.

But Korea recorded imports of $60.2 billion, 35.5 percent higher on year and the highest for any January. Januarys and Februarys typically report lower exports than other months as they can include the Seollal new year holiday, resulting in fewer working days.

As a result, January saw a $4.9 billion trade deficit, 981 percent higher than December's $452 million.

Imports have been rising for the past 14 months due to energy costs and increased demand for intermediate goods, according to the trade ministry.

Fourteen out of Korea’s 15 major export items grew in January: semiconductors, petrochemicals, automobiles, general machinery, petroleum products, steel products, wireless communication devices, auto parts, displays, textiles, home appliances, computers, secondary batteries and bio-health products. The only one that didn't was ships.

Twelve items saw double-digit growth, including semiconductors, which grew 24 percent, petrochemicals (40 percent) and steel (50 percent).

Exports to all regions have been rising for 10 consecutive months, especially in newer markets such as the Central and South Americas, where Korea exported 30.7 percent more on year, and Asean countries, which saw 28.9 percent growth.

Shipments to China grew by 13.1 percent and to the United States by 1.6 percent. Exports to the United States and Asean countries were the highest for any January.

Korea imported $16 billion in energy sources — including crude oil, gas and coal — 131.5 percent more than in January 2021.

Inflation concerns and supply chain bottlenecks also contributed to growing imports, the ministry said, as manufacturers stocked up on intermediate goods.

“Had energy prices been the same as last year, we could have recorded an over $4 billion trade surplus,” a ministry official said.

“Countries that similarly depend on imports for energy, such as Japan and France, also are reporting higher trade deficits.”

BY YOON SO-YEON [[email protected]]