Record High Import Price Index Due to Raw Material Surge... Terms of Trade Worsen for 12 Consecutive Months

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong] As raw material prices surged, South Korea's import value in March rose by 28% compared to a year ago. Consequently, South Korea's terms of trade have deteriorated for 12 consecutive months.

According to the 'March Trade Index and Terms of Trade' statistics released by the Bank of Korea on the 28th, last month's import value index was 178.16 (2015=100), up 28.3% from a year earlier. This marks 16 consecutive months of increase since December last year (2.9%) and is the highest index level since the trade index began in January 1988.

By item, the import value index for mining products rose by 88.4%, and among manufactured goods, coal and petroleum products (57.9%) and primary metal products (23.4%) also showed high growth rates.

The import volume index was 135.23, up 5.1% from a year earlier, marking 19 consecutive months of increase. Based on the import volume index, mining products (22.6%) and computers, electronics, and optical equipment (15.7%) showed high growth rates. Son Jin-sik, head of the price statistics team at the Bank of Korea, explained, "Although machinery and equipment and primary metal products decreased, mining products and computers, electronics, and optical equipment increased, resulting in a 5.1% rise compared to the same month last year."

The export value index (153.28) and export volume index (133.26) also rose by 20.9% and 5.6%, respectively, compared to the same month last year. Due to the rise in international oil prices, the export value index for coal and petroleum products jumped 88%. Mr. Son said, "Both the export value index and export volume index are at record highs," adding, "Although the March export volume index saw decreases in transport equipment and primary metal products, computers, electronics, and optical equipment increased, resulting in a 5.6% rise compared to a year ago."

The net commodity terms of trade index fell 6.3% from a year earlier to 87.30. This is the lowest level in 9 years and 4 months since November 2012 (86.88). The import prices rose more sharply than export prices, causing a decline for 12 consecutive months.

The income terms of trade index fell 1.0% year-on-year, continuing its decline for the second consecutive month, as the export volume index rose (5.6%) but the net commodity terms of trade index fell (-6.3%).

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