Global oil prices fell, but… a weak won pushed import prices up for a sixth straight month

Import prices rose for a sixth consecutive month through last month, data showed. Prices typically ease when global crude prices fall, but the exchange rate—spiking into the high KRW 1,400s per dollar—pushed prices higher.

According to export and import price index statistics released by the Bank of Korea (BOK) on the 14th, the import price index in December (preliminary, in won terms; 2020=100) came in at 142.39, up 0.7% from November (141.47). This marks the first time in 4 years and 2 months that the import price index has risen for six straight months, since May–October 2021.

The BOK said that although global oil prices declined, a stronger dollar and higher prices for items such as primary metal products lifted import prices. The won-dollar exchange rate rose 0.7%, to an average of KRW 1,467.40 in December from KRW 1,457.77 in November. Over the same period, global crude prices based on Dubai crude (monthly average, per barrel) fell 3.8%, to $62.05 from $64.47.

By item, raw materials edged up 0.1% as LNG (+3.6%) and others increased. Intermediate goods rose 1.0% mainly on primary metal products, while capital goods and consumer goods increased 0.7% and 0.4%, respectively.

Still, import prices in January could decline, the BOK projected. Lee Moon-hee, head of the BOK’s price statistics team, said, “So far in January, both Dubai crude prices and the won-dollar exchange rate have fallen compared with the previous month’s average.” He added, however, that “given heightened uncertainty in domestic and external conditions, it is necessary to monitor the situation further.”

The export price index in December (in won terms) was tallied at 140.93, up 1.1% from November (139.42), marking its sixth straight monthly increase as well.

By category, manufactured goods climbed 1.1% month on month, led by computers, electronic and optical equipment (+2.7%) and primary metal products (+5.3%). Agricultural, forestry and fishery products fell 0.4%. Among detailed items, silver bullion (+27.7%), refined copper products (+10.4%), and DRAM (+5.2%) posted sharp gains.

In December, trade indices (in dollar terms) showed the import volume index (126.11) rose 8.7% year on year, while the import value index (146.72) increased 5.9%. For exports, the volume index (141.88) and value index (162.25) advanced 11.9% and 14.8%, respectively. The export value index recorded its largest gain in 1 year and 5 months, since rising 13.8% in July 2024. The net commodity terms-of-trade index (98.30) rose 5.4% year on year, as export prices (+2.6%) increased while import prices (-2.6%) fell.

The net commodity terms-of-trade index is the ratio of the unit price of exports to the unit price of imports, an indicator of how much goods South Korea can import with one unit of exports. The income terms-of-trade index (139.47) rose 17.9% year on year as both the net commodity terms-of-trade index and the export volume index increased.

Reporter Kang Jin-kyu josep@hankyung.com