Seoul, South Korea – Despite a decline in international oil prices last month, South Korea's import prices rose 1.1% in November due to the strengthening of the Korean won against the US dollar, according to data released by the Bank of Korea on Wednesday.
The import price index, which measures the average price of goods imported into the country, stood at 139.03 in November, up from 137.55 in October. This marks the second consecutive month of increases.
The rise in import prices was primarily driven by increases in the prices of agricultural, forestry, and fishery products (2.6%), primary metal products (1.9%), and coal and petroleum products (1.7%). Specific items that saw significant price increases include coffee (6.4%), propane gas (4.0%), refined aluminum (4.0%), and secondary batteries (3.9%).
"Although international oil prices have declined, the strengthening of the Korean won against the US dollar has pushed up import prices," said Lee Mun-hee, head of the Bank of Korea's price statistics team. Indeed, while the average price of Dubai crude oil fell 3.1% from $74.94 per barrel in October to $72.61 in November, the won-dollar exchange rate appreciated by 2.4%, from 1,361.00 won per dollar in October to 1,393.38 won in November.
When asked about the outlook for import prices in December, Lee said, "Although international oil prices have declined slightly in December, the strengthening of the won is creating a mixed outlook. Given the high level of uncertainty in both domestic and external conditions, it is difficult to make a clear forecast."
The export price index also increased 1.6% month-on-month to 130.59 in November, marking the second consecutive month of gains. This increase was mainly driven by higher prices for coal and petroleum products (2.6%) and chemical products (1.3%). Specific items that saw price increases include diesel (4.4%), polypropylene resin (3.0%), and aluminum plates (4.5%).
Lee explained, "The rise in export prices was driven by the strengthening of the won and higher prices for coal and petroleum products."
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