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(3rd LD) April exports sink 24 pct over virus pandemic, first trade deficit since 2012

All News 11:05 May 01, 2020

(ATTN: RECASTS headline, lead; ADDS details throughout)
By Kang Yoon-seung

SEOUL, May 1 (Yonhap) -- South Korea's exports plunged 24.3 percent in April from a year earlier due to a double whammy of the new coronavirus pandemic and the falling oil prices, and suffered the first monthly trade deficit since 2012, data showed Friday.

Outbound shipments came to US$36.9 billion last month, compared with $48.7 billion posted a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.

Imports moved down 15.9 percent on-year in April to $37.8 billion.

The country suffered a trade deficit of $950 million in April, snapping its 98 straight months of having more exports than imports.

"It was inevitable for the country to suffer a trade deficit as South Korea's imports of materials were not disturbed with assembly lines here maintaining normal operations," the ministry said in a statement, calling that the number should "not at all" be regarded gloomy.

(3rd LD) April exports sink 24 pct over virus pandemic, first trade deficit since 2012 - 1

The COVID-19 pandemic that has further made its way across the globe over the month has clobbered the supply chain, with lockdowns and social-distancing drives hindering business activities around the world.

The falling global price of oil has also weighed down exports of petrochemical products, some of the country's key export items.

South Korea also attributed the weak outbound shipments to the fewer number of working days in the month compared to a year earlier, along with a higher base effect.

Outbound shipments of chips, the mainstay export good, decreased 15 percent to $7.1 billion due to the slowing global economy and falling demand for new mobile devices amid the pandemic. But they still accounted for nearly 20 percent of total exports.

Exports of petrochemical products also dipped 33.6 percent over the period to $2.5 billion, while those of petroleum goods halved on-year to $1.6 billion, due mainly to the falling global oil costs that slashed the export prices as well.

Shipments of automobiles surrendered 36.3 percent to $2.4 billion as major dealers around the globe shut down their operations amid lockdowns.

Exports of biohealth products, however, shot up 29 percent over the period amid soaring demand for South Korean test kits for COVID-19. Outbound shipments of computers also doubled on-year as more people worked from home, the data showed.

Stacks of import-export cargo containers at South Korea's largest port in Busan, 450 kilometers south of Seoul (Yonhap)

By destinations, its outbound shipments lost ground in all major countries due to the pandemic, including China, the United States, and Europe.

Exports to China, the top trading partner, decreased 17.9 percent amid falling demand amid the virus spread.

Outbound shipments to the U.S. also moved down 13.5 percent as it refrained from launching new infrastructure and construction projects, leading to less demand for South Korean machines.

Shipments to the European Union tumbled 12.8 percent as lockdowns have been implemented in major countries since March, disrupting South Korea's sales of automobiles and other major goods.

Monthly exports rebounded 4.5 percent in February on-year to end their 14 months of decrease despite increasing virus fallout. But the country's exports fell 0.2 percent in the following month.

South Korea's exports dropped more than 10 percent in 2019.

The country's outbound shipments had been anticipated to rebound 3 percent this year on the eased trade war between the United States and China. The COVID-19 pandemic, however, has dashed such hope.

(3rd LD) April exports sink 24 pct over virus pandemic, first trade deficit since 2012 - 3

The country's economy grew 2 percent last year, the lowest in a decade. The International Monetary Fund (IMF) predicted last month South Korea's economy will shrink 1.2 percent this year, a sharp cut from 2.2 percent growth suggested in January.

The virus has infected more than 3 million around the world so far, although the number of new infections slowed in South Korea.

The country added only four cases Thursday, compared with a peak of 909 on Feb. 29, indicating the recovery of its exports will depend on how effectively other countries tackle the pandemic and normalize the supply chain.

"Since South Korea is considered a stable manufacturing hub on the back of its success in handling COVID-19, the country's exports will rebound once the global pandemic is put under control," Industry Minister Sung Yun-mo said in a statement.


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