Export prices in South Korea jumped 18.6% year-on-year in August, the Bank of Korea said on Tuesday (Sept.14), accelerating from an upwardly revised 17.4% rise in July. It was the fastest rise in export prices since February 2009. Export prices for manufacturing products jumped 18.6% on year and export prices for agricultural, forestry and marine products gained 9.6%.
Meanwhile, import prices soared 21.6% from a year earlier, the most since December 2008;
and up from 19.5% in the previous month due to higher oil prices. On a monthly basis, export prices rose 1%, the ninth straight monthly gain amid a strong recovery in exports while import prices gained 0.6%.
Exports from the Asian country stood at USD 53.93 billion last month, up 34.9% year-on-year, and after a 29.6% growth in July, according to Ministry of Trade, Industry & Energy (MOTIE) data, beating the forecast of economists. This was the tenth straight month of expansion amid the continued recovery in global demand.
Exports of semiconductors, petrochemicals, and cars jumped 43.0%, 81.5%, and 16.9%, respectively.
Breakdown of data also showed exports of wireless devices soared 62.2%, bio-health products (17.1%), and secondary batteries (10.9%).
By destination, shipments rose to China (26.8%), the US (38%), Japan (44%), the EU (41.6%), and the ASEAN (27.2%)
Meanwhile, merchandise imports jumped 44.0% over the same month last year in August (July: +38.1% y-o-y), marking the strongest increase since May 2010.
“Semiconductors are playing the role of vanguard in the export growth trend, and that combined with petrochemicals and general machinery providing a strong backbone and emerging categories such as biohealth and rechargeable batteries experiencing rapid growth has allowed steady performance to continue without being unsettled by external variables,” said Minister of Trade, Industry and Energy Moon Sung-wook.
Moon also said the result was attributable to the “competitiveness of manufacturing.” Business confidence among manufacturing firms rose to 96.0 in September from August’s 92.0. As such, the index moved closer to the 100-point threshold, The improvement was mainly led by domestic demand-oriented firms. In addition, export-oriented firms became slightly more optimistic, with firms more upbeat about sales and profitability.
“It’s fortunate that exports at least have performed strongly amid the weak domestic demand, although one hitch is that the volumes haven’t increased by that much,” The Hankyoreh daily quoted Joo Won, chief of the economic research office at the Hyundai Research Institute, as saying. The economist suggested that the export “boom” is mainly a reflection of rising raw material prices while the actual increase remains limited. “Given our industry structure where we rely on outside sources for purchasing a lot of the components, technology, and materials that go into making export items, it’s difficult for the export boom to translate into increasing domestic demand,” he added.
But The Korea Herald reported the country’s exports may lose steam in September or October, due to the slowing Chinese economy coupled with disruptions at production lines in Southeast Asia.