Export-Import Price Index Turns Up After Three Months... Impact of Rising International Oil Prices

Bank of Korea Announces January Export and Import Price Index
Ends Two-Month Decline, Shifts to Joint Increase
Oil Prices Surge Amid Russia-Ukraine Conflict

Busan Port Sinsundae and Gammam Pier
[Image source=Yonhap News]

Due to rising international oil prices and raw material costs, as well as global supply bottlenecks, the export-import price index has turned to an upward trend after three months. With the geopolitical conflict between Russia and Ukraine intensifying, and many forecasts suggesting that international oil prices could surge above $100 per barrel, domestic inflationary pressures are expected to continue for the time being.

According to the 'January Export-Import Price Index' released by the Bank of Korea on the 14th, last month's import price index stood at 132.27, up 4.1% from the previous month and 30.1% from the same month last year. The import price index had fallen for two consecutive months in November and December last year as international oil prices temporarily eased, but with oil prices rising sharply again this year, it reversed to an upward trend after three months.

According to the Bank of Korea's Economic Statistics System, the spot price of Dubai crude oil rose from $73.21 per barrel in December last year to $84.47 per barrel in January this year. This represents a 14.0% increase from the previous month and a 52.3% increase from the same month last year. Consequently, raw material prices, centered on mining products, rose 8.2% in one month, and intermediate goods such as coal and petroleum products, primary metal products, and chemical products also increased by 2.7%. Capital goods and consumer goods rose by 2.0% and 0.7%, respectively.

Last month's export price index was 116.01, up 1.4% from the previous month and 22.3% from the same month last year. The export price index also fell for two consecutive months in November and December last year but turned to an upward trend last month. Among coal and petroleum products, diesel (16.3%), jet fuel (16.6%), and gasoline (13.2%) saw significant increases, and fruits (7.2%) and aluminum plates (16.0%) also rose considerably. However, semiconductors fell 5.9% compared to the previous month.

With various factors such as international oil prices and exchange rates worsening recently, export-import prices are expected to continue rising for the time being. The rise in import prices can lead to increases in producer and consumer prices, raising concerns about domestic inflation. There are also forecasts that international oil prices could exceed $100 per barrel due to concerns over Russia's invasion of Ukraine.

If Russia invades Ukraine, U.S. sanctions could reduce Russia's crude oil exports, exacerbating the imbalance in crude oil supply and demand. Since Ukraine is also the world's fifth-largest wheat exporter, international grain prices are likely to be affected. The Bank of Korea recently explained in its 'Assessment of the Spread of Inflationary Pressures' report that "this year's consumer price and core inflation rates will significantly exceed last year's levels."

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