Best Trade
According to the Trade Index and Terms of Trade in December reported by the Bank of Korea on Jan. 22, last year’s net barter terms of trade index was 89.94, up 0.4 percent from 2013. This is the highest figure after 2010 (100.0).
The net barter terms of trade index shows the quantity of products that could be imported with the money (based on dollars) earned from the exports of one unit. In other words, if the export of one unit could allow the import of 100 products from overseas in 2010, it can now buy 89.94 products.
The improvement of terms of trade was due to the drop in international oil prices. The annual average oil price from Dubai last year was US$95.56 per barrel, down 8.3 percent from US$105.25 in 2013.
As a result, the decline of import prices (-2.6 percent) was more than that of export prices (-2.2 percent).
The net barter terms of trade index continuously improved by 0.6 percent in September, 1.3 percent in October, 3.0 percent in November, and 3.9 percent in December when the oil price began to drop in earnest.
The income terms of trade index, which indexes the quantity of products that can be imported by the total exports, not one unit, recorded the highest figure in history last year with 118.34. This means that the purchasing power through foreign trade has grown that much.
Last year’s quantity of exports increased by 4.4 percent from the previous year. The increase was shown, in particular, in semiconductors and electronic display devices (10.5 percent), primary metal products (8.9 percent), and precision instruments (8.2 percent). The export quantity of agriculture and forestry products (-9.6 percent) and fiber and leather products (-3.0 percent) decreased.
Amid an average 2.1 percent increase in the export amount across all industries, the export amounts of agriculture and forestry products (-11.7 percent), fiber and leather products (-1.7 percent), and coal and petroleum products (-3.3 percent) decreased.
Last year's quantity of imports increased by 4.7 percent. In particular, imports of transport equipment (20.7 percent), electric and electronic devices (8.6 percent), and fiber and leather products (7.5 percent) increased on a large scale. Also, the total import amount increased by 1.9 percent.