Exporting & Importing Price Decline for Three Consecutive Months

Because of the evaluation of Korea Won to US dollars, the exporting and the exporting price have declined for three consecutive months.

According to the report of Korea Reserve Bank “Tendency of the importing and exporting price in July”, exporting price decreased by 1.8% compared to June and importing price by 1.6%. Each decreased by 8.8% and 7.2 % compared to the last July.

Average foreign currency rate of Won to US dollar in July is 1184.97 Won (based on closing time) and dropped by 37.11 Won (3%) compared to June. Taking the effect of evaluation into account, actual exporting price increased by 0.9%, and importing price by 0.8% compared to the last month.

The decrease of importing price acts as a decreasing factor of consumer price after one or two months later.

However, the decrease of exporting price is expected to be bigger than that of importing price, so the export condition will be worse.

Exporting price index of July dropped to 104.4 as year 1995 is 100, it is lowest one since November of 1997(103.6) for last 4 years and 8 months time. The exporting price of agricultural products increased by 1.4%, but that of manufactured and mining products decreased by 1.9% and 3.2% each partly because of the delay of global economy recovery and partly because of price competition between rival companies in the international markets.

Importing price dropped 1.6% for materials, 0.8% for capital goods and 4% for consumer goods because of the evaluation of Korean Won even if oil price increased to some extent.

Sang-Chul Kim sckim007@donga.com