October Export Prices Rebound... Trade Index at an 'All-Time High'

[Financial News] Last month, export prices rebounded for the first time in three months. This was due to continued strong exports of IT products, including semiconductors, despite declines in both the won-dollar exchange rate and international oil prices. Import prices turned lower after a month, as raw material prices fell.
According to the preliminary October Export and Import Price Index released by the Bank of Korea on the 13th, the export price index (in won) rose 0.7% from the previous month. It reversed the declines recorded in August (-3.5%) and September (-0.5%). Compared with the same month a year earlier, it rose 36.7%.
Export prices rose despite the decline in the won-dollar exchange rate (from an average of 1,359.00 won in September to 1,337.66 won in October, down 1.6% from the previous month) because prices of key items such as semiconductors remained strong.
By product, agricultural, forestry and fishery products, which include fresh marine products (26.3%), rose 1.8% from the previous month. Among manufactured goods, primary metal products (-3.1%) and other items fell, but computers, electronics and optical equipment (up 3.7%, including semiconductors) rose, driving the overall increase.
Export prices measured in contract currencies also rose 2.4% from the previous month (45.5% year on year).
By contrast, the import price index (in won) fell 1.8% in October from the previous month, returning to a downward trend. The decline in the exchange rate and international oil prices (Dubai crude averaged $113.71 per barrel in September and $110.73 in October, down 2.6% from the previous month) pushed down import prices, including those of mining products and primary metal products. Compared with the same month a year earlier, the index remained 13.5% higher, partly due to mining products.
By category, raw material prices fell 3.0% from the previous month, led by mining products (-3.0%), as crude oil prices declined. Prices of intermediate goods (-1.0%), capital goods (-1.8%) and consumer goods (-1.4%) also all fell from the previous month.
The export volume index and the income terms of trade index both hit all-time highs.
The export volume index surged 43.9% in October from the same month a year earlier, setting a new record. Semiconductors, computer memory, electronic display devices and semiconductor manufacturing machinery led export growth. The export value index also soared 107.6%.
The import volume index also rose 14.9%, driven by increases in semiconductor manufacturing equipment, chemical products and other items.
The net barter terms of trade index, which measures the volume of imports that can be purchased with export proceeds, rose 21.3% from the same month a year earlier. This was because export prices (44.3%) rose more than import prices (18.9%).
In particular, the income terms of trade index, which shows the volume of goods that can be imported with total export proceeds, jumped 74.6% from the same month a year earlier as both the net barter terms of trade index (21.3%) and the export volume index (43.9%) surged, also setting a new all-time high.
[email protected] Jung Sang-gyun Reporter