South Korea’s export and import prices weakened in September as a stronger Korean won offset the sharp rise in global oil prices, boding ill for the country’s exports that have stayed sluggish throughout the year.
According to export and import price indices data released by the Bank of Korea on Wednesday, the country’s export price index in September fell 0.8 percent on month and 5.0 percent from the same month a year earlier.
The Korean currency’s strengthening against the greenback dragged down both import and export prices, the bank said. The Korean won, which averaged 1,208.98 per U.S. dollar in August, strengthened 0.9 percent to 1,197.55 in September.
Prices of the benchmark Dubai crude gained 3.4 percent on month but the strengthening won pushed down the export prices of industrial products. Prices of computers, electronics and optic devices slid 1.6 percent, with prices of mainstay chips and DRAM chips each down 0.9 percent. Chemical product prices retreated 1.6 percent on month.
Some of the items that saw a jump in export prices were Bunker-C oil (11.9 percent), naphtha (5.9 percent) and silver bullions (5.2 percent). Price falls were steep for TV displays (-4.9 percent) and polyethylene (-3.4 percent).
Import prices in September also slipped due to the stronger local currency, down 0.4 percent on month and 2.2 percent on year.
Prices of coal and petroleum products rose 4.2 percent on month due to the jump in global oil prices. Prices of refined precious metals surged 12.1 percent and those of frozen fishery products 8.3 percent.
Intermediary good prices slid 0.6 percent, led primarily by the 3.2 percent drop in computers, electronics and optic devices and 0.9 percent fall in chemical goods. Prices of system semiconductors plummeted 6.4 percent and scrap iron 6.2 percent.
The BOK saw the weak import prices to have limited effect on overall consumer prices, as raw materials and intermediary goods make up a large portion of the country’s import items. Korea’s consumer price index in September was down 0.4 percent on year after testing sub-zero territory in August. It was the country’s first negative inflation, stoking concerns about deflation.
When factoring out currency fluctuations, export prices inched up 0.2 percent and import prices 0.6 percent from the previous month.
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