61-month High
The Bank of Korea announced on June 24 that Korea’s net barter terms of trade index reached 100.7 last month to rise by 12.7 percent from a year ago. The reference point and year are 100 and 2010, respectively. The index improved for nine months in a row and reached a 61-month high.
The improvement in trade conditions is based on today’s low oil prices. More than 97 percent of the petroleum Korea uses is imported. Therefore, a decline in oil prices tends to result in better trade conditions in Korea. Last month, the average Dubai crude price dropped 44 percent year-on-year to US$59.6 per barrel. That of Western Texas crude fell 41.3 percent to US$60.3 per barrel during the same period, too.
In the meantime, Korea’s income trade index rose by 12.5 percent from a year earlier to add up to 129.97 last month. This index is used to show the amount of imported goods that can be bought with all exports.
Still, its export volume declined in spite of the improved trade conditions. The export volume index edged down by 0.2 percent year-on-year to 129.07. The export volume index had shown a 2.5 percent decrease in May last year and a 2.2 percent decrease in Feb. this year.