Trade Conditions
Trade conditions have improved for the first time in five months for Korea, as the recent decline in international oil prices caused the import price to fall more than the export price.
According to the Bank of Korea’s data released on Oct. 23, the country’s net terms of trade index reached 90.37 last month, showing a 0.7 percent increase from a year earlier, to get to its highest level since August last year. The index had been at 90.41 at that time and dropped by 0.4 percent in May this year, 1.3 percent in June, 1.9 percent in July, and 0.9 percent in August.
In September, the export price fell by 1.3 percent, while the import price lost 2.0 percent. “The decline in import price can be attributed to the 4.9 percent drop in oil price and 21.5 percent in iron ore price before anything else,” said Jung Kui-yun at the Price Statistics Team of the central bank, adding, “The export price fell as the prices of semiconductor products and refined petroleum products exported from Korea declined.”
In the meantime, the income terms of the trade index increased by 8.1 percent to 118.13 between September 2013 and September 2014.