Export Value Index Declines for Two Consecutive Months... Terms of Trade Worsen for 20 Months

Last month, South Korea's export value index fell by more than 11% compared to a year ago, but the import value index rose by over 3%, continuing its upward trend for 24 consecutive months. As export values decreased and import values increased, the terms of trade worsened for the 20th consecutive month.

According to the "November Trade Index and Terms of Trade" (based on the dollar) statistics released by the Bank of Korea on the 29th, the export value index last month dropped 11.3% compared to the same month last year. This marks the second consecutive month of decline following the first downturn in 24 months since October 2020 (-3.4%). The rate of decline also increased compared to the previous month (-6.6%).

By product category, significant declines were seen in textiles and leather products (-19.0%), primary metal products (-21.7%), chemical products (-17.0%), and computers, electronics, and optical devices (-25.4%). On the other hand, coal and petroleum products (26.8%) and transportation equipment (21.8%) showed increases.

The export volume index also fell 6.3% year-on-year, showing a decline for the second consecutive month. Textiles and leather products (-18.6%), chemical products (-10.3%), and electrical equipment (-6.8%) experienced notable decreases.

The import value index and import volume index in November rose by 3.3% and 3.8%, respectively, compared to a year ago. The import value index has maintained an upward trend for 24 months, and the import volume index for 5 months.

Looking at individual product categories, import values of transportation equipment (50.5%) and mining products (19.1%) increased significantly. The import volume index was mainly driven up by transportation equipment (76.7%), computers, electronics, and optical devices (8.2%), and machinery and equipment (7.4%).

The export-import value index is an indicator calculated by dividing the export-import value at the given time (in dollars) by the export-import value at the base period (2015), and the export-import volume index is derived by dividing this export-import value index by the export-import price index.

The net commodity terms of trade index fell 4.9% compared to a year ago, marking 20 consecutive months of decline. This indicates that while export prices are falling, import prices continue to rise, worsening the terms of trade.

The net commodity 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, serving as an indicator of how much import volume South Korea can obtain per unit of export.

The income terms of trade index fell 10.9% during the same period, declining for 10 consecutive months. This is because both the export volume index (-6.3%) and the net commodity terms of trade index (-4.9%) decreased last month. The income terms of trade index shows the total quantity of goods that South Korea can import with its total export value.

Containers are stacked full in the Gammam Pier yard at Busan Port. [Image source=Yonhap News]

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