February Export Prices Rise 1.2% MoM... "Impact of Exchange Rate Increase and Oil Price Decline" (Comprehensive)

Bank of Korea's 'February 2020 Export Price Index'

[Image source=Yonhap News]

[Asia Economy Reporters Eunbyeol Kim, Sehee Jang] Due to the rise in the exchange rate and the rebound in semiconductor prices, export prices turned upward again in February. Meanwhile, import prices fell for the second consecutive month due to the decline in oil prices. Although it was expected that the spread of the novel coronavirus (COVID-19) would negatively impact export prices, export prices actually rose compared to the previous month due to the exchange rate effect.

According to the "February 2020 Export and Import Price Index" released by the Bank of Korea on the 13th, the export price index in February was 97.90, rising 1.2% from the previous month, returning to an upward trend after one month.

The Bank of Korea analyzed that the rebound in export prices in February was influenced by the rise in the won-dollar exchange rate. Hwang Kwan-gu, head of the Price Statistics Team at the Bank of Korea's Economic Statistics Bureau, explained, "The rise in the exchange rate caused prices of computers, electronic and optical devices, and transportation equipment to increase, affecting the rise in export prices." The average won-dollar exchange rate in February was 1,193.79 won, up 2.5% from January (1,164.28 won).

When the exchange rate effect is removed and measured in contract currency terms, export prices fell 1.1% from the previous month and decreased 7.2% compared to the same month last year.

By sector, agricultural, forestry, and fishery products rose 2.3% from the previous month in February.

Manufactured goods also increased 1.2% from the previous month, with "computers, electronic and optical devices" (3.5%) and "transportation equipment" (2.0%) rising.

By detailed item, flash memory rose 10.7%, DRAM 2.8%, LCDs for TVs 4.3%, portable phones 2.5%, frozen seafood 2.6%, and RV automobiles 1.9%.

The import price index in February was 106.52, down 1.3% from the previous month. This is 0.9% lower than the same month last year.

The Bank of Korea pointed out that this was due to the decline in international oil prices. The average price of Dubai crude oil last month was $54.23 per barrel, down 15.7% from the previous month ($64.32).

Raw materials such as minerals fell 6.9% from the previous month. In the case of intermediate goods, coal and petroleum products declined, but import prices of computers, electronic and optical devices, and electrical equipment rose, resulting in a 0.8% increase from the previous month.

A Bank of Korea official explained, "The 0.8% rise in import prices of intermediate goods from the previous month was due to the rise in the exchange rate," adding, "When excluding the exchange rate effect and measured in contract currency terms, it showed a 1.5% decline."

Capital goods and consumer goods rose 1.6% and 1.3%, respectively, from the previous month.

Import prices also fell 3.4% from the previous month and 6.2% from the same month last year when measured in contract currency terms excluding the exchange rate effect.

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