Fall in Korean Products’ Competitive Price Edge

Recent developments indicate that 6 out of 10 national export companies are suffering declines in competitive price in the foreign market.

Despite the exchange rate advantage, the companies whose export payability are getting worse outnumber by three times those who are improving.

The Korean Trade Association reported the results from a survey of 205 export companies on August 12. 123 companies (63 percent) answered `Decline in competitive price this year`, 30 (14.6 percent) answered `Improving`, and 50 (24.4 percent) said `average`.

Although the current exchange rate of 1 dollar to 1300 won is a relatively good situation for export companies, 78 companies (38 percent) said `Export payability worsening`, three times more than the 22 companies (10.7 percent) that answered `Export costs improving`.

The percentage decline in the companies’ export payability is around 17.4 percent. 88 companies (42.9 percent) answered `Export payability average`. Among the reasons cited for the recent decline in exports, `Foreign Economy Slump` came in first with 41.4 percent, `Competitive Price Decline` with 32.2 percent, and `Product Quality Decline` with 21.3 percent.

Park Jin Dal, head of the Planning Investigation Team of the Trade Association explained, ``When the economic slump abroad hit the market, foreign companies lowered their prices which in turn weakened the competitive prices of Korean exports.``

kkh@donga.com