Import prices in July fell for the second consecutive month as exchange rates and international oil prices decreased.
According to statistics released by the Bank of Korea on August 14, the import price index (in won, with 2020 as the base year at 100) stood at 160.09 in July, a 1.0% decrease from June.
The decline in import prices was driven by lower exchange rates and international oil prices, particularly affecting coal, petroleum products, and primary metal products. The average monthly price of Dubai crude oil dropped from $79.45 per barrel in June to $76.75 in July, a decrease of 3.4%. The exchange rate fell from an average of 1,527.3 won in June to 1,497.43 won in July.
By category, raw materials saw a rise of 0.8% compared to the previous month, primarily due to an increase in natural gas prices. Intermediate goods, particularly coal and petroleum products (-3.9%) and primary metal products (-3.8%), fell by 2.2% month-on-month. Capital goods and consumer goods decreased by 1.8% and 0.1%, respectively.
Notable declines among specific items included propane gas (-25.2%), system semiconductors (-9.9%), bunker C oil (-7.8%), and crude oil (-4.8%).
The export price index for July (in won) was 190.65, reflecting a 1.0% increase from the previous month, reversing a 0.1% decline in June. This increase was influenced by rising prices for computers, electronics, optical devices, coal, and petroleum products.
In terms of specific items, diesel prices rose by 11.2%, computer memory prices increased by 17.6%, DRAM prices went up by 6.6%, and naphtha prices rose by 6.2%.
The trade index for July (in dollars) showed that the export volume index and import volume index increased by 20.0% and 14.7%, respectively, compared to July of the previous year. The export value index and import value index surged by 64.2% and 25.8%.
Trade conditions improved significantly, with the net commodity terms of trade index rising by 24.7% year-on-year, as the increase in export prices outpaced that of import prices.
The net commodity terms of trade index measures the ratio of the price of one unit of exported goods to the price of one unit of imported goods, indicating how much product can be imported for each unit exported.
Lee Heung-hoo, head of the price statistics team at the Bank of Korea, stated, "The continued improvement in trade conditions is due to simultaneous increases in the prices and volumes of export items, suggesting that the export competitiveness of our companies has strengthened."
He added, "Since trade conditions also reflect external purchasing power, we can assess that our economy's external purchasing power is continuously improving."
Regarding the outlook for this month, he noted, "As of August 12, the average exchange rate has fallen by about 5% compared to the previous month, but due to heightened tensions in the Middle East, international oil prices have risen by 7.3%, creating mixed upward and downward pressures."
* This article has been translated by AI.
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