S. Korea's March exports rise as teleconference demand surges

SEOUL • South Korean year-on-year exports rose 10 per cent in the first 20 days of this month as lockdowns across the world to prevent the spread of the coronavirus fuelled demand for teleconferencing technology and components.

Outbound shipments of semiconductors, the nation's major export, jumped 20.3 per cent on-year, Korea Customs Service data showed yesterday, better than a 15.4 per cent rise seen a month earlier.

"Demand from cloud computing firms has boosted sales of server chips, while an increase in telecommuting in the United States and China has also been a main drive to huge server demand," a trade ministry official told Reuters.

"But exports in April and May will worsen," the official added, reflecting the significant fall in exporting contracts seen from February.

Chip giant Samsung Electronics said last week the pandemic would hurt sales of smartphones and consumer electronics this year, although the chip market - which makes up about half of Samsung's operating profit - would see demand growth.

Average exports per working day slid 0.4 per cent during the period when eliminating the calendar effect, slower than a 9.3 per cent decrease in the Feb 1-20 period.

There were 1.5 more working days in the first 20 days of this month compared with the same period last year.

The fast-spreading virus has triggered a shutdown in factories across the globe, disrupting manufacturing and global supply chains.

Separately, a survey of 915 exporters yesterday showed South Korean firms overwhelmingly expect shipments to fall in the second quarter as lockdowns and quarantines across the world hit global demand.

The Korea International Trade Association index of the export outlook for the April to June period plunged to a seven-year low, as demand from trading partners declined and raw material costs soared.

A growing number of analysts expect Asia's fourth largest economy to contract this year, with S&P Global Ratings now seeing a 0.6 per cent fall.

A breakdown of the trade data also showed overseas sales of cars and smartphones rose 13.7 per cent and 26.6 per cent, respectively.

However, exports of vessels tumbled 49.6 per cent.

Exports to China, South Korea's largest trading partner which takes in a quarter of total overseas sales, rose 4.9 per cent on-year in the 20-day period, while those to the United States and the European Union jumped 27.2 per cent and 13.5 per cent, respectively.

Last week, the country's central bank, the Bank of Korea, slashed interest rates by 50 basis points to a record-low of 0.75 per cent and Parliament approved an 11.7 trillion won (S$13.4 billion) extra budget.

REUTERS