Exports from the 1st to 20th of this month down 15.2%... "10 consecutive months of decline seem inevitable" (Comprehensive)

Korea Customs Service, Export-Import Status from July 1 to 20
Exports Decline for 9 Consecutive Months Until Last Month

Exports from the beginning of this month through the 20th have decreased by more than 15%, raising the likelihood that overall exports for July will continue to decline. This is due to sluggish exports of semiconductors and petroleum products caused by a slowdown in global demand and price drops following the decline in oil prices.

On the 21st, the Korea Customs Service announced that export value from July 1 to 20 was $31.2 billion, down 15.2% (-$5.61 billion) compared to the same period last year. If this trend continues, exports are expected to decline for the 10th consecutive month. Exports had decreased year-on-year for nine consecutive months from October last year through last month.

Imports also recorded $32.6 billion, a 28.0% decrease, resulting in a trade deficit of $1.4 billion. Consequently, cumulative exports through July 20 this year totaled $338.4 billion, down 12.6% from the same period last year. Imports amounted to $366.2 billion, a 9.9% decrease. The trade deficit reached $27.8 billion.

Continued Sluggish Exports of Semiconductors and Petroleum Products

Among the 10 major export items, exports of eight items declined except for passenger cars and computer peripherals. Passenger cars increased by 27.9% year-on-year to $3.4 billion, but semiconductors and petroleum products plunged by 35.4% and 48.7%, respectively.

By country, exports to eight of the top 10 export destinations decreased, except for India (3.6%) and Hong Kong (21.1%). Exports to China (-21.2%), Vietnam (-22.6%), and the United States (-7.3%) declined.

The decline in import value was even steeper. In just this month, imports fell by 28%, more than double the 11.2% decrease recorded in the previous month. Among major items, imports of crude oil (-53.3%), petroleum products (-41.2%), and semiconductors (-26.5%) decreased, except for wireless communication devices (14.5%). By country, imports from Vietnam (0.6%) and Malaysia (17.5%) increased, while imports from China (-21.4%), the United States (-21.0%), and Japan (-18.9%) decreased.

Possibility of Overall Surplus for July

There is still a possibility that the trade surplus recorded last month will continue this month. In June, the trade balance from the 1st to the 20th showed a surplus of $1.6 billion, and overall, a surplus of $1.1 billion was recorded, marking the first surplus in 16 months since February last year.

However, the problem was that this was a 'recession-type surplus' caused by imports decreasing more than exports. In June, exports fell 6% year-on-year, while imports dropped 11.7%. The sharp decline in imports was influenced by reduced energy imports such as crude oil and gas. Although crude oil import volume increased by 3.6% from 74.1 million barrels in June last year to 76.7 million barrels, the import price plunged 31% due to the fall in international oil prices (Dubai crude oil price per barrel from $113.3 to $75).

The government has begun establishing a 'Trade Structure Transformation Strategy' to achieve a positive export growth rate as early as possible. Through four divisions?▲diversification of export items and markets ▲high value-added trade ▲expansion of trade scope ▲innovation of trade support systems?the goal is to create a trade structure that can grow stably without being easily shaken by changes in external conditions. Ahn Deok-geun, Director-General for Trade Negotiations at the Ministry of Trade, Industry and Energy, said, "It is a time when efforts to fundamentally change Korea's trade structure are more necessary than ever before. We will break away from the current trade structure concentrated on specific items like semiconductors and markets like China, foster future promising items, and expand export markets to new promising markets to diversify the export portfolio."

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