Import Prices Rise 9.0% Year-on-Year Due to Oil Price Increase... Turn Positive After 14 Months

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] With the rise in international oil prices and the won-dollar exchange rate, export and import prices increased for the fourth consecutive month compared to the previous month. In particular, import prices rose 9.0% year-on-year, marking an increase for the first time in 14 months, with the largest rise since October 2018 (11.1%).

According to the "March 2021 Export and Import Price Index" released by the Bank of Korea on the 14th, the export price index in March recorded 101.46 (2015=100), rising 3.3% month-on-month as export prices of coal and petroleum products, chemical products, and others increased amid the rising won-dollar exchange rate. This marks the fourth consecutive month of increase. Year-on-year, it rose 5.6%.

The average won-dollar exchange rate rose 1.7% month-on-month from 1,111.72 won in February to 1,131.02 won in March.

Export prices of agricultural, forestry, and fishery products increased 0.4% month-on-month, while manufactured goods rose 3.3%. This was due to increases in coal and petroleum products (5.7%) and chemical products (6.5%).

The import price index also rose 3.4% month-on-month due to the increase in international oil prices. Year-on-year, it rose 9.0%, marking an increase for the first time in 14 months.

The Dubai crude oil price, which averaged $60.89 per barrel in February, rose 5.8% to $64.44 per barrel in March, which was the main factor driving up import prices.

By item, import prices of mining products rose 5.9%, pushing raw materials up 5.5%. Intermediate goods increased 3.4% due to rises in coal and petroleum products (6.0%) and chemical products (4.5%). Capital goods and consumer goods rose 1.1% and 1.2% month-on-month, respectively.

Kim Young-hwan, head of the price statistics team at the Bank of Korea, said, "Although the time lag for import prices to be reflected in consumer price inflation has recently shortened somewhat, I think it affects manufactured goods, petroleum products, and dining-out costs. Since private consumption trends are also reflected in prices, we need to observe further to see how much impact it will have on consumer prices."

He added, "Even in April, there still seems to be some upward pressure on oil prices, raw material prices, and exchange rates that affect exports and imports. Since there is also the factor of COVID-19 resurgence, we need to watch closely."

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