The net barter terms of trade index jumped 27.1 percent from a year earlier, the largest gain since the series began in 1988, while the income terms of trade index climbed 60.0 percent, also a record increase, according to the Bank of Korea (BOK).
Lag-adjusted export prices rose 39.6 percent from a year earlier, led by semiconductors, far outpacing a 9.9 percent increase in import prices.
The net barter measure shows how much can be imported with the proceeds from one unit of exports, while the income terms of trade also take export volume into account.
The improvement accelerated from July, when the net barter terms of trade rose 24.7 percent and the income measure increased 49.7 percent from a year earlier.
Oil prices point to renewed pressure on import costs.
Dubai crude averaged $88.75 a barrel in August, up 15.6 percent from $76.75 in July. Oil prices had fallen 3.4 percent in July, when lower energy costs and a stronger won moved in the same direction to help pull down import prices.
The currency provided some relief in August.
The U.S. dollar averaged 1,406.30 won, down from 1,497.43 won in July, translating into a 6.1 percent gain in the won on a monthly-average basis. The local currency had strengthened 2.0 percent in July.
Import prices declined 2.4 percent from July for a third consecutive monthly drop. Measured in contract currencies, however, import prices rose 3.2 percent, widening the divergence already seen in July, when won-based prices fell while contract-currency prices increased.
Won-based import prices remained 15.6 percent higher than a year earlier.
Export prices showed the same currency effect.
The won-based export price index fell 3.7 percent from July, its steepest monthly decline since December 2022, while export prices measured in contract currencies rose 2.2 percent.
Won-based export prices were still 42.4 percent higher than a year earlier, extending their annual increase to a 12th consecutive month.
Chips remained the key driver.
DRAM export prices surged 253.4 percent from a year earlier and flash memory prices climbed 250.6 percent, although DRAM prices slipped 3.4 percent from July.
Export volume increased 25.9 percent from a year earlier for a 10th consecutive gain, supported by computer, electronic and optical equipment as well as chemical products. The export value index jumped 75.8 percent.
Import volume rose 12.0 percent from a year earlier, while the import value index gained 23.1 percent, with demand for electronic products and machinery remaining strong.
AJP Takeaways
- South Korea's net barter terms of trade rose 27.1 percent from a year earlier in August, the largest increase since records began in 1988, as semiconductor export prices continued to outpace import prices.
- Won-based import prices fell 2.4 percent from July despite a 15.6 percent rise in Dubai crude as the average dollar-won exchange rate declined 6.1 percent.
- The income terms of trade climbed a record 60.0 percent from a year earlier as stronger export prices combined with a 25.9 percent rise in export volume.
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