Import prices fell sharply in June, marking the largest decline in three and a half years, due to a significant drop in international oil prices. Although the won-dollar exchange rate rose considerably, the impact of falling oil prices offset this increase, keeping export prices stable.
According to the Bank of Korea's export and import price index released on July 15, the export price index (in won, with 2020 as the base year) stood at 188.90 in June, unchanged from 188.82 in May.
The rise in the won-dollar exchange rate did not affect oil product prices, which decreased. The average monthly exchange rate surged from 1,490.11 won in May to 1,527.3 won in June.
By category, agricultural and fishery products saw a 4.2% increase from the previous month, driven by higher prices for fruits. While prices for coal and oil products (diesel, jet fuel) fell, prices for computers, electronics, and optical devices (semiconductors) remained similar to the previous month.
Among specific items, prices for fruits (up 10.6%), DRAM (up 3.1%), and flash memory (up 11.7%) increased compared to the previous month. Conversely, prices for diesel (-15.6%), jet fuel (-18.2%), and ethylene (-19.9%) declined.
Import prices dropped 4.4% from the previous month to 161.34, the lowest level since December 2022 (-6.5%).
The average price of Dubai crude oil fell 23.0%, from $103.15 per barrel in May to $79.45 in June. However, this price is still 14.7% higher than in the same month last year.
Raw material import prices decreased by 10.3% due to falling prices for mining products, including crude oil. Intermediate goods saw a 3.2% decline, driven by lower prices for coal, oil products, and chemicals, while capital goods and consumer goods each rose by 1.6%.
Specific items that saw price drops included crude oil (-20.7%), naphtha (-25.5%), bunker C oil (-19.2%), and styrene monomer (-19.9%). In contrast, prices for signal converters (up 9.4%) and coffee (up 4.6%) increased.
In June, the trade index (in dollars) showed that the export volume index and import volume index rose by 29.8% and 12.0%, respectively, compared to June of last year. The export value index and import value index surged by 74.8% and 30.5%.
The terms of trade index for goods increased by 15.6% year-on-year, as the rise in export prices outpaced that of import prices. The income terms of trade index also rose by 50.0%, driven by increases in both the terms of trade index and the export volume index.
The decline in import prices is expected to ease inflationary pressures on consumer prices. Lee Moon-hee, head of the price statistics team at the Bank of Korea, stated, "The increase in consumer goods import prices in June was attributed to the rise in the won-dollar exchange rate compared to the previous month and the same month last year. However, with the decline in raw material and intermediate goods import prices compared to the previous month, the burden on consumer prices is expected to ease somewhat going forward."
* This article has been translated by AI.
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