S. Korea’s import price falls for 2nd straight month in May

South Korea’s import prices, which exert significant influences on domestic consumer prices, dropped for the second month straight in May. 

May’s import prices dwindled 1.9 percent from the previous month due largely to a fall in import prices of crude oil and petroleum products, based on data compiled by the Bank of Korea (BOK) Friday. May’s figure recorded the steepest fall since May last year when import prices dropped 2.3 percent on-month, and import prices have been in decline for two straight months since April (-1.0 percent). 

On a yearly basis, Korea’s import prices jumped 2.1 percent. However, when calculated using the contract currency, or the currency used for exports and imports, import prices slumped 3.9 percent from the previous year in May, marking the second fall after April (-2.5 percent). Using the contract currency, import prices plunged 3.6 percent on-month, and the prices have dropped for two straight months since April (-2.0 percent). 

“Further developments remain to be seen, but import prices are shrinking for now,” a BOK official said. “A decrease in international raw material prices dwarfed import prices.” 

By sector, import prices of raw materials contracted 3.9 percent on-month on the back of price declines in agro-fisheries products such as corns, frozen fish and mining products such as crude oil, copper ores. Despite a rise in import prices of primary steel products, computers, audio-video and communications equipments, import prices of intermediate goods went down 0.7 percent on-month, backed by reduced import prices of primary non-metallic products and petroleum products. 

Import prices of capital goods rose 1.6 percent on-month, but those of consumer goods diminished 0.9 percent during the same period. 

Meanwhile, Korea’s export prices dropped 0.3 percent from the previous month, but, on a yearly basis, export prices surged 3.2 percent in May this year.