South Korea's exports moved down 11.1 percent in February from a year earlier, government data showed Friday, due to the falling global prices of chips coupled with the slowing Chinese economy.
Outbound shipments came to US$39.56 billion for last month, down from the $44.52 billion posted a year earlier, according to the data compiled by the Ministry of Trade, Industry and Energy.
Imports decreased 12.6 percent over the cited period to reach $36.4 billion, the ministry added.
South Korea's trade surplus came to $3.1 billion in February, marking 85 straight months in which the country's exports have exceeded imports. Considering the average monthly trade surplus came to $5.9 billion in 2018, the latest tally represents a noticeable drop.
Last month marked the third consecutive month that exports backtracked, which is a first since July 2016.
The industry ministry said the decrease was attributable to the falling price of chips, the country's mainstay export product, along with the slowing Chinese economy, the biggest trading partner for South Korea.
The Lunar New Year Holiday, which resulted in fewer operation days, also led to the decrease, the ministry added.
In contrast to chips and petrochemical products, numbers for cars, machineries and steel products maintained their growth, with newly emerging products, such as bio-health and agricultural goods, gaining traction.
The ministry said while the on-year drop for February was sharper than January's 5.9 percent decline, it is hasty to say the country's trade environment sharply deteriorated, considering the lower number of business days.
The ministry pointed out that the world's leading exporters all suffered sluggish export growth.
The International Monetary Fund has been revising down the growth outlook of the global economy for 2019, indicating that slower exports is not an issue only confronting South Korea.
South Korea's exports of chips came to US$6.7 billion in February, a plunge of 24.8 percent from a year earlier.
Along with the falling price, the ministry said the global demand for smartphones also slowed, while major tech firms delayed their investment in data centers.
Exports of petrochemical products came to $3.48 billion, down 14.8 percent on-year, as their price decreased despite the rising global oil price due to the rise in supply from the United States.
The export of ships plunged a whopping 46.5 percent to US$1.3 billion. The ministry said the sharp decline of orders in 2016 continued to exert a negative impact, as it takes around two to three years to build and export ships.
Exports of machineries gained ground due to the rising demand from China and India, with that of cars rising on the back of the release of new SUVs. Steel gained ground on the back of demand from the United States and Japan.
By region, South Korea's exports to China nose-dived 17.4 percent to US$9.5 billion, falling on-year for the fourth consecutive month. Exports to the European Union also shed 8.5 percent to stand at $4 billion following the region's slowing economy.
The deliveries to the U.S., on the other hand, gained ground for the fifth consecutive month to $5.43 billion on the back of automobiles, mobile devices and petrochemical goods.
The ministry said it has been making government wide efforts to support the country's exports. Seoul plans to announce a set of measures to revitalize exports next week.
"We will release measures to support small and medium-sized enterprises, agricultural products, bio-health, cultural content linked to 'hallyu' and other service industries," said Industry Minister Sung Yun-mo. Hallyu refers to the Asiawide popularity of Korean pop culture.
The policymaker said South Korea is still seeking to post combined exports of above US$600 billion for 2019. Last year, South Korea's outbound shipment came to $605.5 billion, marking the first time they surpassed the $600-billion level.
For the remainder of 2019, the ministry said the price of chips should stabilize, particularly toward the second half of the year. (Yonhap)