Export Value Index Falls for the First Time in 2 Years... Terms of Trade Worsen for 19 Consecutive Months

Containers loaded with import and export cargo are piled up at Busan Port's Sinsundae Pier and Gammam Pier. [Image source=Yonhap News]

As exports of semiconductors and other products continued to slump, South Korea's export value index turned downward for the first time in two years. Meanwhile, the import value index maintained its upward trend for the 23rd consecutive month. Accordingly, the terms of trade index, which indicates export efficiency relative to imports, declined for the 19th consecutive month.

According to the "October Trade Index and Terms of Trade" (in US dollars) statistics released by the Bank of Korea on the 30th, last month's export value index stood at 125.02 (2015=100), down 6.7% from the previous year.

This marks the first decline in 24 months since October 2020 (-3.4%). The rate of decline was also the steepest in 2 years and 2 months since August 2020 (-9.3%).

The export downturn was particularly pronounced in textile and leather products (-19.0%), primary metal products (-16.2%), chemical products (-14.1%), and computer, electronic, and optical equipment (-13.0%).

The export volume index also fell by 3.4% compared to a year earlier, registering 116.43.

On the other hand, last month's import value index (165.10) and import volume index (130.29) rose by 9.8% and 5.3% respectively from the previous year, continuing their upward trends. The import value index has increased for 23 consecutive months, and the import volume index for 4 consecutive months.

Imports of mineral products such as petroleum (28.6%) and transport equipment (32.4%) increased significantly. Regarding the import volume index, transport equipment (52.8%) and computer, electronic, and optical equipment (23.2%) saw substantial growth.

As a result, the net goods terms of trade index (84.74) dropped 7.4% over the year, declining for the 19th consecutive month. Seo Jeong-seok, head of the Bank of Korea's Price Statistics Team, explained, "Export prices fell due to weakness in major export items such as semiconductors, while import prices rose influenced by high energy prices compared to the previous year."

The net goods terms of trade index is the ratio of the price of one unit of export goods to the price of one unit of import goods. It gauges how many units of imports South Korea can obtain per unit of exports.

The income terms of trade index (98.66) fell 10.6% from a year earlier as both the export volume index (-3.4%) and net goods terms of trade index (-7.4%) declined. This index represents the total quantity of goods that can be imported with South Korea's total export value.

Seo said, "While exports of transport equipment centered on eco-friendly vehicles and secondary batteries continue to perform well, export values of chemical products, petroleum products, and semiconductors are decreasing."

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