Korea's exports decline for 14th straight month

Pinched by weak overseas demand and low oil prices, South Korea’s exports plummeted 12.2 percent in February compared to the same month a year before, continuing the double-digit fall trend for the third straight month.

The country’s overall outbound shipments tumbled to $36.4 billion last month from $41.5 billion in the same month last year, according to a monthly trade report by Ministry of Trade, Industry and Energy on Tuesday.

The February figure showed a slight improvement from January’s 18.5 percent, the largest year-on-year fall since August 2009. But the monthly exports kept falling for 14 straight months, marking the longest monthly decline since the country began compiling shipments data.

A continuous drop in oil prices and slowing demand from emerging markets have been pushing the outbound shipments to plunge, dealing a blow to Asia’s fourth-largest economy, which relies heavily on exports for growth.

Meanwhile, imports also plunged 14.6 percent on-year to $29 billion last month, keeping the trade surplus to $7.4 billion. The country has posted a trade surplus for the 49th consecutive month, the ministry added.

Looking at the positive side, the February decline narrowed from the previous month due to a rebound in shipments of information technology devices, electronics and cosmetics.

“Despite export decreases in shipbuilding, chips and petrochemical products, overseas shipments of computers, wireless devices and machinery rebounded last month from the previous month,” the ministry said.

Exports of computers and cell phones grew 6.2 percent and 2.8 percent on-year, respectively, last month, riding on fresh demand for new products such as Samsung Electronics’ Galaxy 7 smartphone unveiled late last month.

Exports of organic light-emitting diodes and cosmetics continued to rise, growing by 29.7 percent and 22.4 percent, respectively.

In contrast, traditional export items, including petrochemical products and ships, dived 26.9 percent and 46 percent on-year, while car makers and flat-panel display manufacturers suffered declines of 9.3 percent and 22.1 percent, respectively.

By region, outbound shipments to China, Korea’s largest export destination, dropped 12.9 percent on-year. China accounts for 25 percent of South Korea’s overseas shipments.

Prospects of the country’s exports remain negative, the ministry said, citing China’s slowing economy and oil prices.

“Growing uncertainties such as economic slowdown in China and low oil prices will keep weighing heavily on Korea’s outbound shipments,” an official said.

“We will carefully monitor the downward trend of (Korean) exports and will focus on devising ways to tackle sluggish exports, while running a pan governmental support system.”

By Cho Chung-un (christory@heraldcorp.com)