SEOUL, May 15 (AJP) - South Korea’s import prices fell against a double-digit jump in March last month on eased international oil prices despite prolonged Middle East crisis, helping to feed robust trade terms despite slower growth in export prices from strong chip demand.
The import price index fell 2.3 percent in April after a 18 percent surge seen in March on lower international oil prices and U.S dollar.
As the average price of Dubai crude fell 17.8 percent month on month in April, import prices of raw materials, including mining products, dropped 9.7 percent.
Intermediate goods, which are closer to the prices felt by businesses, rose 2.1 percent from the previous month due to a lagging effect.
Despite the decline in oil prices, products such as coal and petroleum (up 6.2 percent) and chemical products (up 1.7 percent) continued their upward trend as previous energy price hikes were reflected with a time lag.
Against a year-ago, import prices were 20.2 percent higher.
Among import items, mining products including crude oil jumped 36.5 percent on year, while import prices for coal and petroleum products rose 67.0 percent, further fueling overall upward inflationary pressure.
Export prices rose 7.1 percent from the previous month, slowing from 17-percent jump in March.
On year, they were 40.8 percent higher, strongest since 57.8 percent surge in March 1998.
Key IT items, such as DRAM (up 232.8 percent) and computer storage devices (up 149.2 percent), led the index rise.
Export price strengthening is primarily owed to semiconductor boom, unlike the past - when the surge was driven by a weak won plummeted around 1,800-level as of late 1997 and early 1998, and the transfer of raw material prices.
Trade indicators improved as export prices (up 33.6 percent) rose at a faster pace than import prices (up 16.9 percent), leading to an increase in the net terms-of-trade index (up 14.3 percent) and the export volume index (up 12.4 percent).
Yet, the situation requires close monitoring as upward pressure on prices across the industry remains firm.
"While the rise in import prices has slowed due to the fall in international oil prices, intermediate goods prices remain high due to the time-lag effect," said Lee Moon-hee, head of the Price Statistics Team at the BOK’s Economic Statistics Department.
"Given the continued rise in export prices driven by semiconductors and the fact that geopolitical risks in the Middle East have not been fully resolved, we must closely monitor the impact on domestic consumer prices in the future.”
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