Seoul, Nov 1 (IANS) South Korea’s exports contracted at the steepest rate in six years in October as outbound shipments backtracked for the tenth straight month, the data said on Sunday.
Outbound shipments came to $43.47 billion last month, down 15.8 percent from the same month last year — the sharpest drop since a 20.9 percent plunge tallied for August 2009, Yonhap cited the Ministry of Trade, Industry and Energy as saying.
It said that despite the negative growth, the country’s trade surplus remained in the positive territory as imports slipped at a faster pace. Imports fell 16.6 percent on-year to $36.78 billion.
The country’s trade surplus for the month stood at $6.69 billion, down from $8.9 billion tallied the month before. October also marked the 45th straight month that Asia’s fourth-largest economy posted a trade surplus.
The ministry said the drop in exports was due to the decline in both prices of products and volume of products shipped abroad.
In October, the average price of South Korean goods sent overseas backtracked 7.1 percent year-on-year, slowing from a 13 percent drop in the previous month.
Exports, in terms of total volume, plunged 9.4 percent on-year last month, a turnaround from a 5.3 percent rise in September, the ministry’s latest data showed.
Besides refined petroleum and petrochemicals, exports of cars, steel and ships all fell as global demand weakened, the monthly tally said.
The ministry forecast the country’s exports to continue to stay in the negative territory in November, although the pace of decline may lessen as local shipyards are expected to turn over more new vessels to their owners.
It added that since international oil prices started falling sharply after October 2014, trade volume numbers that have been swayed by commodities prices should start falling less in the coming months.
It said every effort will be made to diversify export markets and alter the types of products being exported.
Despite such measures that will be taken by the government, local market watchers said trade conditions may not improve in the near future as the Chinese economy will likely be gripped by sluggish growth and uncertainties are mounting over the expected move by the US Federal Reserve to mark up interest rates within the year.
“The domestic economy is clearly on the mend, but prospects for exports are not that good at the moment,” an economist said.
Supporting such views, the business survey index (BSI) for the country’s manufacturing sector released late last week by the Bank of Korea dipped to 80 from 81 reached in September.
A reading below 100 means pessimists outnumber optimists.
The same report showed that the BSI for export in November stood at 81, down three points from the forecast for October.