Trade terms decline for 10th consecutive month in January

All News 12:00 February 25, 2022

SEOUL, Feb. 25 (Yonhap) -- South Korea's terms of trade fell for the 10th straight month in January as import costs rose at a faster clip than export prices, central bank data showed Friday.

The nation's net terms-of-trade index for goods -- a gauge of overall trade terms -- stood at 89.42 last month, down 6.8 percent from a year earlier, according to preliminary data from the Bank of Korea (BOK).

The figure has marked on-year declines each month since April when the index fell 0.6 percent from a year earlier.

Compared with the previous month, however, January's index rose 2 percent.

In December last year, the terms of trade hit the lowest level in more than nine years of 87.72.

The figure is calculated by dividing the index for export prices by that for import prices. It shows the amount of imports a country can buy for each unit of exports.

The base year is 2015, with a benchmark index of 100.

In January, import prices spiked 21.9 percent from a year earlier, while those of exported goods grew 13.6 percent, according to the BOK.

The index for the value of exported goods advanced 22.4 percent on-year to 134.94 last month on solid global demand for chips, petrochemicals and other key products, marking the 15th consecutive month of on-year increase.

The index for the value of imported goods also spiked 34.4 percent to 166.70 in January due to soaring international energy and materials costs. It marked the 14th consecutive month of on-year increase, the data showed.

"The surge in imports prices was caused by high oil and raw materials prices. Such a level is likely to continue for some time, given tensions surrounding Ukraine," a BOK official said.

Dubai crude, South Korea's benchmark, soared to $98.64 per barrel Thursday, up from $77.12 at the end of last year. South Korea depends on imports for most of its energy needs.