International Oil Prices and Exchange Rate Fall Together... October Import Prices Decline After One-Month Rise

Dubai crude down 2.6%, exchange rate down 1.6%
Oil prices fall further in November... downward trend likely to continue
Export volume index hits record high... up 43.9% year on year

Import prices fell again after rising for one month. The decline was particularly pronounced in mining products, as the won-dollar exchange rate and international oil prices both fell. Although the exchange rate has edged up so far this month, international oil prices have fallen by a greater margin, and import prices are expected to continue their current downward trend.

According to the "October 2026 Export and Import Price Indexes and Trade Indexes (Preliminary)" released by the Bank of Korea on November 13, the won-denominated import price index stood at 156.86 (2020=100) last month, down 1.8% from the previous month.

Import prices surged 18.0% month on month last March in the wake of the war in the Middle East, then fluctuated in April and May. They fell 4.2%, 1.0%, and 2.2% in June, July, and August, respectively, before rising again in September.

Import prices fell again after one month because international oil prices and the exchange rate, both of which have a significant impact, declined at the same time. The monthly average price of Dubai crude remained high last month at $110.73 per barrel, but fell 2.6% from $113.71 the previous month. The won-dollar exchange rate fell 1.6% to 1,337.66 won per dollar from 1,359.0 won. As a result, prices fell, particularly for mining products and primary metal products.

By use, raw materials saw the steepest decline. Raw material prices fell 3.0% from the previous month, led by mining products, as crude oil prices declined. Intermediate goods prices fell 1.0% month on month: coal and petroleum products rose 3.5%, while primary metal products fell 4.2% and electrical equipment fell 3.4%. Capital goods and consumer goods fell 1.8% and 1.4%, respectively, from the previous month.

Excluding the effect of the exchange rate, import prices in contract currencies fell 0.2% month on month in October. In other words, although international oil prices declined, the exchange rate had a greater impact than oil prices on this month's drop in import prices.

Although import prices fell month on month, they rose 13.5% from a year earlier, marking eight consecutive months of double-digit increases. Lee Heunghu, head of the Price Statistics Team at the Bank of Korea's Economic Statistics Department 1, explained, "International oil prices fell from the previous month, but were still high, rising 70.4% from a year earlier," adding, "This reflects coal and petroleum product prices being passed through to raw material prices with a time lag."

Import prices are likely to continue falling this month. Lee said, "The exchange rate rose from the previous month through November 11, but international oil prices fell by about 13% over the same period," adding, "This will act as a downward factor for import prices."

Export Prices Rise for First Time in Three Months... DRAM Prices Up 5.5%

The export price index stood at 184.15 last month, up 0.7% from the previous month. Despite the decline in the exchange rate, prices of computers, electronic and optical equipment jumped, turning upward for the first time in three months. The index rose 36.7% from a year earlier.

Prices of manufactured goods rose 0.7% month on month. Primary metal products fell 3.1% and transport equipment fell 2.0%, while computers, electronic and optical equipment rose 3.7%. In detail, semiconductor DRAM prices increased 5.5% from the previous month. Lee said, "Semiconductor prices are negotiated in the fourth quarter, and there was an increase as fixed contract prices were reflected in semiconductor prices in October, the first month of the quarter."

Agricultural, forestry, and fishery product prices rose 1.8% from the previous month, as fresh fishery products jumped 26.3%. The increase in fresh fishery product prices came as export shipments also declined following a drop in domestic shipments of abalone, flounder, and other products.

In October, export prices in contract currencies rose 2.4% from the previous month and 45.5% from a year earlier.

The export volume index, which shows changes in exports and imports, rose 43.9% from a year earlier, reaching a record high. Lee explained, "The increase was driven by continued growth in volumes of semiconductors and computers, electronic and optical equipment, as well as a larger increase in machinery and electrical equipment, which are related to AI infrastructure." He added, "Machinery shipments increased mainly on equipment used in semiconductor manufacturing, while electrical equipment shipments grew mainly on transformers and data center batteries." The export value index rose 107.6%.

Over the same period, the import volume index rose 14.9%, as imports increased of semiconductors; computers, electronic and optical equipment, including computers; and machinery and equipment, including semiconductor manufacturing equipment. The import value index rose 36.6%.

In October, the net barter terms of trade index rose 21.3%, as export prices increased much more than import prices. The net barter terms of trade index measures the volume of goods that can be imported with the proceeds from one unit of exports, indexed against the base period (2020=100). Lee explained, "Semiconductor export prices continued to rise, although the pace of increase slowed again. Meanwhile, import prices rose faster due to higher international oil prices, narrowing the increase in the index."

The income terms of trade index, which shows how much the volume of goods that can be imported with total export proceeds has increased, rose 74.6% to a record high as both the net barter terms of trade index and the export volume index increased.

This content was produced with the assistance of AI translation services.