Korea’s export and import prices all dropped for two consecutive months on account of the decline of exchange rate and the weaker raw material prices. The export prices declined to the lowest level in five years and eight months, prompting concerns over deteriorating profitability of export companies.
The export price index for October reached 91.21 (base level of 100 in 2010), down 1.9% from the prior month of this year, the lowest level since in February 2008 (89.07). When compared to the export prices index a year before, 4.6% is declined, according to the Bank of Korea (BOK).
In general, a rise in export prices has a positive impact on the profitability of companies, but a decline in export prices negatively affects companies’ profitability. An official from the BOK explained “Export prices for October declined 1.9% month-onmonth (mom) on sliding won/dollars rates.”
The won rose 1.9% from 1,087.35 per dollar in September this year to 1,066.80 in October. By product, agricultural and fishery products climbed 2.6% mom including marine products while industrial goods fell 1.9% mom including chemical and primary metal products.
By Kim Min-su : Here
