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S. Korea's trade terms post highest in 5 years on cheap oil

Xinhua, January 25, 2016 Adjust font size:

Terms of trade in South Korea posted the highest in five years in 2015 thanks to cheap crude oil, central bank data showed Monday.

The net terms-of-trade index for goods, which gauges how many goods can be imported with a unit export, was 99.97 in 2015, up 11.2 percent from a year earlier, according to the Bank of Korea (BOK).

The 2015 reading was the highest since 2010, marking the fastest yearly increase since the bank began compiling the data in 1988.

The improved trade terms came as cheaper crude oil decreased energy import costs. Dubai crude, the country's benchmark, averaged over 50 U.S. dollars per barrel in early January last year, falling to the low end of 30 dollars in late December.

In December alone, the net terms-of-trade index for goods stood at 100.83, up 8 percent from a year ago. Import prices tumbled 18.3 percent, a faster fall in export prices that slumped 11.8 percent in December.

The income terms-of-trade index, which measures how many goods can be imported with total export proceeds, came in at 134.71 in 205, up 14 percent from the previous year. It marked the highest in the country's history.

In terms of volume, exports grew 2.5 percent last year, with imports increasing 3.3 percent. Endit