South Korea’s trade conditions continued to deteriorate for 12 months in a row in November due to the steady rise in prices of oil, a key commodity for which the country heavily relies on imports.
According to trade index data announced by the Bank of Korea on Friday, Korea’s net barter terms of trade index, which refers to the ratio of exports price index to imports price index, came to 90.49 in November, down 10.9 percent from the same period a year ago. The index has been on a decline since December last year when it marked 90.43. The figure is also the lowest since 90.48 in October 2014.
The index measures the amount of imports that can be purchased with each unit of exports. A figure below 100 indicates import cost is higher than export price.
Trade terms are highly affected by international oil prices. In case of Korea, trade conditions worsen as it depends heavily on imports for petroleum, and import price rises with higher crude oil prices.
Last month, export price fell 1.3 percent whereas import price soared 10.7 percent on year, resulting in unfavorable trade condition.
In October, prices of Dubai crude soared 2.8 percent from the previous month to an average of $79.39 per barrel. Oil prices in October are reflected in the November trade terms index.
BOK data, meanwhile, showed an increase in Korea’s export and import volume indices.
Korea’s export volume index rose 2.9 percent to 159.88 in November from a year ago. The rise in index was smaller than in October when it increased 25.8 percent on more working days after Chuseok holiday.
The index for electric and electronic devices jumped 6.4 percent on year in November while coal and petroleum products 11.6 percent. Korea’s export value index also jumped 11.2 percent on year.
By Lee Yu-sup and Lee Eun-joo
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