South Korea posts longest export drop in history

(From Korea JoongAng Daily)

Korea’s exports posted another double-digit decline in year-on-year growth in February, as demand shrivels with the slowdown in China and unit prices of major products remain low.

Cars waiting to be loaded at South Korean port

Cars waiting to be loaded at South Korean port.

According to the Ministry of Trade, Industry and Energy on Tuesday, the nation’s total exports were $36.4 billion in February, a 12.2 percent fall from the same month last year. Exports shrank for the 14th straight month, the longest such streak in Korea’s history.

Compared to a shuddering 18.8 percent year-on-year fall in January, the rate of decrease fell slightly last month. However, since exports are the main growth component of the Korean economy, the February figure strongly suggests the government’s 3.1 percent growth target for GDP this year is unattainable.

“Outbound shipments of major products dropped in February amid persisting adverse conditions – low oil prices, falling unit prices and a global slowdown,” said Lee In-ho, a deputy trade minister. “The government forecasts that exports will continue to go downhill in the midst of growing uncertainties in the global economy.”

According to the ministry’s analysis, exports of vessels plummeted by a whopping 46 percent in February from a year earlier, leading the overall decline. The fall is attributed to a lengthy slump in the global shipbuilding market.

Exports of display panels tumbled 22.1 percent during the same period due to falling prices of liquid crystal displays as a result of increasing production of panels by Chinese companies. The unit price of a 32-inch liquid crystal display panel slid from $94 to $51 as of last month.

Semiconductor exports dipped 12.6 percent year on year because of price declines of dynamic random-access memory chips from $3.44 per 4 gigabytes to $1.84.

In addition, automobiles declined 9.3 percent, while auto parts inched down 2.1 percent. Read more

Categories: Asia Unhedged, Koreas

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