Exports fall in October for first time in two years

According to the Ministry of Trade, Industry and Energy on Tuesday, exports in October shrunk 5.7 percent year-on-year to $52.5 billion. Imports grew 9.9 percent to $59.2 billion.

A port in Busan on Nov.1. Export has declined for the first time in two years. [YONHAP]

Korea's monthly exports fell for the first time in two years.

According to the Ministry of Trade, Industry and Energy on Tuesday, exports in October shrunk 5.7 percent year-on-year to $52.5 billion. Imports grew 9.9 percent to $59.2 billion.

The last month exports fell year-on-year was in October 2020 during the Covid-19 pandemic, when they shrunk 3.9 percent.

The decline reverses a good first 10 months of the year, in which exports set a record for the period of $577.4 billion, up 10.3 percent from a year earlier.

At the current rate, the government expects exports for the year to break the record of $644.4 billion set last year.

The trade deficit last month reached $6.7 billion and it was the seventh straight month for the country to report a deficit, the longest stretch since the Asian financial crisis in the late 1990s.

The government attributed shrinking exports to a slowing global economy caused by the war in Ukraine and the tightening of monetary policies in major countries including the United States

“The 24.2 percent year-on-year increase in October 2021 also had a base effect,” said Moon Dong-min, deputy minister of international trade and investment.

Leading export items including semiconductors, petrochemicals and mobile communication devices such as smartphones all shrank.

Semiconductor exports, which account for 18 percent of all Korean exports, shrunk 17.4 percent year-on-year to $9.2 billion.

System semiconductors continued to grow in the double-digits (17.6 percent) and now account for 37.8 percent of all computer chip exports, an increase from 31.1 percent at the end of 2021. But the bigger category of memory chips tumbled 35.7 percent.

Petrochemical exports dropped 25.5 percent to $3.7 billion while steel exports fell 20 percent to $2.7 billion. So-called biohealth products such as biosimilar drugs shrunk 18.7 percent to $1 billion.

Automotive exports rose 28.5 percent year-on-year to nearly $5 billion while rechargeable battery exports rose 16.7 percent to $800 million.

Thanks to high energy prices, petroleum goods including refined gasoline exports rose 7.6 percent to $4.4 billion.

Higher costs for energy imports and the strong dollar against the Korean won contributed to the sharp increase in imports.

Energy imports including crude oil, gas and coal went up 42 percent to $15.5 billion.

In the first 10 months of this year, Korea imported $158.7 billion in energy products, an 82 percent surge.

By region, exports to the U.S. and Europe continue to grow while exports to China fell. While exports to the U.S. have been increasing year-on-year for 26 consecutive months, exports to China have been falling for six straight months, the longest stretch since the two countries resumed trade 30 years ago.

Exports to the U.S. rose 6.6 percent to $8.6 billion while exports to the EU rose 10.3 percent to $5.6 billion.

Exports to China fell 15.7 percent to $12.2 billion.

Automobile exports to the U.S. surged 65.5 percent while exports of secondary batteries shot up 93.2 percent. Exports of automotive parts went up 30 percent.

Exports of semiconductors to China fell 23.3 percent.

Other export markets including Asean, Japan and South America all contracted.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]