Exports Negative for 14 Consecutive Months... "Adverse Impact if New Coronavirus Spreads" (Comprehensive)

January Exports Down 6.1% Year-on-Year
Ministry of Industry: "Due to 2.5 Fewer Working Days"
Impact of New Coronavirus Still Limited
Export Inspection Meeting on 3rd... "Full Efforts for Export Recovery"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] Our exports have recorded a negative growth for 14 consecutive months. The government analyzed that the main reason was the reduced number of working days due to the Lunar New Year holidays. It is expected that if the novel coronavirus (Wuhan pneumonia) situation prolongs, it will have an adverse effect on February exports.

According to the 'January 2020 Export-Import Trends' announced by the Ministry of Trade, Industry and Energy on the 1st, last month's export amount (customs clearance basis) was $43.35 billion, down 6.1% compared to the same month last year. The decline in exports was larger than December last year (-5.2%).

Thus, our exports have continued a negative streak for 14 consecutive months since December 2018.

Last month's imports amounted to $42.73 billion, down 5.3% compared to the same month last year. The trade balance recorded a surplus of $620 million, marking 96 consecutive months of surplus.

Impact of Reduced Working Days... Daily Average Exports Increase for the First Time in 14 Months

The Ministry of Trade, Industry and Energy stated that the decline in January exports was due to the shortage of working days. Last month, the number of working days was 21.5 days, 2.5 days fewer than January last year (24 days). This is because the Lunar New Year holidays were in February last year but included in January this year.

Excluding the effect of working days, the daily average export amount turned positive for the first time in 14 months. January's daily average export amount increased by 4.8% compared to the same month last year to $2.02 billion, exceeding the previous year's average ($1.99 billion). The daily average export volume increased by 0.4%.

Among the top 20 major items, nine showed an increase in daily average exports. These include semiconductors (7.8%), general machinery (6.3%), petroleum products (9.2%), ships (77.5%), computers (60.4%), plastic products (2.8%), biohealth (52.0%), cosmetics (12.3%), and robots (0.9%).

Export unit prices also rebounded for the first time in 14 months. The export unit price in January increased by 4.4% compared to the same month last year, turning positive for the first time since December 2018.

Last month's semiconductor export decline rate (-3.4%) was the lowest in 14 months. As semiconductor unit prices recovered, the export decline rate showed the lowest level since December 2018.

While NAND fixed prices have been rising for seven consecutive months, DRAM fixed prices also rebounded for the first time in 14 months.

Last month's export growth was prominent in ships (59.0%), computers (43.7%), and biohealth (36.2%). On the other hand, exports of displays (-26.8%), wireless communication devices (-23.2%), and automobiles (-22.2%) decreased sharply.

"If the Novel Coronavirus Prolongs, Exports to China Will Face Difficulties... Negative Impact on February Exports"

The Ministry of Trade, Industry and Energy explained that the impact of the novel coronavirus on January exports was limited. This is because the proportion of exports to Hubei Province in South Korea's total exports is only 0.3%.

Based on 2018 export amounts, exports to Hubei Province amounted to $1.76 billion, accounting for 0.3% of the total. There are 29 South Korean companies operating in Hubei Province, which is about 0.8% of all South Korean companies operating in China.

However, a ministry official stated, "If this situation prolongs, there are concerns about disruptions in exports to China," adding, "From February, when economic activities resume in earnest after the Lunar New Year, there is a possibility of negative impacts on our exports."

Asia Economy DB=Photo by Hyunmin Kim kimhyun81@

Minister Sung Yun-mo of the Ministry of Trade, Industry and Energy said that difficulties are expected in exports to China if the novel coronavirus spreads, and pledged to make every effort to recover exports. On the 3rd, Minister Sung plans to hold an emergency export situation review meeting.

Minister Sung said, "The overall export decline was inevitable due to the impact of the Lunar New Year holidays," but added, "Excluding the effect of working days, daily average exports turned to an increase for the first time in 14 months, establishing momentum for export recovery."

He continued, "If the current improvement trend continues, exports in February are expected to be positive, but since difficulties are expected in exports to China if the novel coronavirus spreads, we will make every effort to maintain the export recovery trend."

At the export situation review meeting, specific measures such as ▲expanding trade insurance support for small and medium-sized enterprises, ▲strengthening overseas marketing and exhibition support, and ▲identifying and resolving difficulties faced by export companies will be discussed.

This content was produced with the assistance of AI translation services.