Export prices sink to lowest level since 2016

South Korea’s export prices fell in March, as the fallout of the new coronavirus continued to rattle domestic and global markets, central bank data showed Tuesday.

While global oil prices largely weighed upon the figure, the uptrend in the semiconductor business partly countered the downside effects.

The export prices index in terms of local currency stood at 96.59 last month, down 1.1 percent from a month earlier and reaching the lowest since September 2016, according to preliminary data from the Bank of Korea.

Also, the latest figure was down 3.3 percent from a year earlier, prolonging the downtrend for 10 months straight.

“Despite the won-dollar exchange rate drop, export prices fell on-month in March due to cuts in prices of coal, petroleum products and chemical products,” the BOK said in a release.

The Korean won traded at an average of 1,220.09 won per dollar last month, down 2.2 percent from the previous month’s average, it added.

Counting out the impact of the exchange rate, the country’s export prices fell 3.1 percent on-month in March.

The key reason of the overall price dip was the decrease in global oil prices amid the COVID-19 pandemic.

The per barrel price of the benchmark Dubai crude reached $33.71 in March, down 37.8 percent from a month earlier, data showed.

This brought down the average export price of diesel (29.7 percent), gasoline (42.5 percent), jet fuel (19.3 percent) and xylene (16.7 percent).

The favorable factor for Asia’s fourth-largest economy, on the other hand, is the semiconductor prices which have remained on an upturn for two consecutive months.

While the spread of COVID-19 dampened the production of smartphones and consumption of mobile parts, the consequent practices of telecommuting and home schooling boosted the demands of computer parts and data storage facilities, according to observers.

Concerns mounted, however, on the country’s trade front as the rest of the world is reeling under the epidemic, in contrast to Korea which is seen to have come past its peak.

The Korea Customs Service said that outbound shipments plunged 18.6 percent on-year during the first 10 days of April.

By Bae Hyun-jung (tellme@heraldcorp.com)