Import prices in July fell 1% from the previous month, the Bank of Korea said on the 14th. The won-dollar exchange rate and global oil prices both trended lower. But compared with the same month a year earlier, they were up 18.7%, fueling continued concern that consumer prices could be pushed up over time.
The average monthly exchange rate fell 1.95% from 1,527.3 won in June to 1,497.4 won in July. On the same basis, Dubai crude fell 3.4% to $76.75 a barrel.
According to the Bank of Korea's provisional "July export and import price index and trade index" released that day, import prices for materials and supplies rose 0.8% from the previous month. Crude prices fell, but natural gas jumped 24.8%, pushing up mining products. Compared with a year earlier, they were up 24%. Intermediate goods fell 2.2% from the previous month, led by coal and petroleum products (-3.9%), basic metal products (-3.8%), and computer, electronic and optical equipment (-2.2%). Compared with the same month a year earlier, they were up 22.1%.
Export prices rose 1% from the previous month, aided by gains in semiconductor prices, a key export. Compared with a year earlier, they were up 49.1%, with the increase larger than in the previous month (48.7%). In particular, export prices for DRAM for export rose 270.3% from a year earlier, and flash memory rose 248.1%. In addition, naphtha rose 76.2% and diesel 71.3%. A Bank of Korea official said, "Semiconductors are continuing a very strong price uptrend."
The net barter terms of trade index rose 24.7% from a year earlier. The net barter terms of trade index indicates how much of another country's goods can be purchased with the money earned by exporting one good from a country. If the same amount of exports buys more goods, the index goes up.
A Bank of Korea official explained, "The continued improvement in terms of trade is due to the simultaneous rise in export item prices and increase in volumes," adding, "We can assess that corporations' export competitiveness has strengthened and external purchasing power has continued to improve."