Exports Driven by Semiconductors, Imports by Oil Prices: Diverging Inflation Trends

[Financial News] Domestic export prices slowed somewhat, but they still rose for the 11th straight month. The increase was driven by steady gains in semiconductor prices and the won–dollar exchange rate. Import prices, however, fell for a second consecutive month as international oil prices declined.
According to the "May 2026 Export and Import Price Indexes and Trade Indexes" released by the Bank of Korea on the 16th, the won-denominated export price index rose 0.3% from the previous month in May. It has been climbing for 11 straight months since July last year, when it first rose 0.8%.
The pace was weaker than in March, when the index posted its sharpest increase in 28 years and two months at 17.0% since January 1998, or in April, when it rose 7.5%.
But compared with the same month a year earlier, the index jumped 46.9%. It has been rising for nine straight months since September last year, and the latest gain exceeded April's 41.3% increase.
Industrial goods rose 0.3% from the previous month. Coal and petroleum products fell 11.0%, but that was offset by gains in computers, electronics and optical equipment, which include semiconductors, up 5.4%, and primary metals such as copper and aluminum, up 2.3%. Looking only at semiconductors, DRAM rose 7.6% from the previous month and flash memory climbed 19.5%. Compared with a year earlier, those figures surged 259.7% and 223.0%, respectively.
Agricultural, forestry and fishery products also rose 1.8% from the previous month, though that was far below April's 10.3% increase.
In contract-currency terms, which exclude exchange-rate effects, export prices in May rose 0.1% from the previous month and were up 37.8% from a year earlier.
Last month's import price index fell 0.3% from the previous month, extending its decline for a second month after April's 2.1% drop. Compared with the same month a year earlier, it rose 24.8%.
The decline in global oil prices was the main factor. The monthly average price of Dubai crude fell 2.4% from $105.70 per barrel in April to $103.15 in May.
Raw materials fell 1.0% on the back of a 1.1% drop in mining products such as crude oil.
Intermediate goods were flat overall, as coal and petroleum products fell 2.6% while primary metals rose 1.9%. Capital goods and consumer goods each increased 0.3%.
In contract-currency terms, import prices fell 0.5% from the previous month.
Moon-hee Lee, head of the Price Statistics Team at the Economic Statistics Department 1 of the BOK, said, "Going forward, prices will be affected by the stabilization of raw material prices such as international oil, as well as movements in the won–dollar exchange rate." She added, "The key issue is how quickly facilities in the Middle East will return to normal after the ceasefire agreement."
In May, the export volume index rose 14.7% from a year earlier, driven by gains in computers, electronics and optical equipment, up 25.9%, and primary metals, up 17.6%, despite a 16.1% drop in coal and petroleum products. The export value index jumped 56.8% over the same period.
The import volume index also rose 5.2% from a year earlier, as computers, electronics and optical equipment increased 25.8% even though coal and petroleum products fell 1.3%. The import value index climbed 21.3%.
The net barter terms of trade index, which measures the amount of goods that can be imported per unit of exports, rose 18.7% from a year earlier as export prices increased much more sharply than import prices, up 36.8% and 15.3%, respectively. It also rose 4.8% from the previous month.
The income terms of trade index rose 36.1% from a year earlier, as both the net barter terms of trade index, up 18.7%, and the export volume index, up 14.7%, increased over the same period. The income terms of trade index measures the ability to expand imports using export earnings. A rise in the index means that the quantity of imports that can be purchased with total export revenue has improved.

taeil0808@fnnews.com Kim Tae-il Reporter