South Korea’s early trade data indicates patchy exports recovery

SEOUL – Growth in South Korean exports moderated at the start of 2024, suggesting any recovery in global trade this year could be bumpy.

The value of shipments adjusted for working-day differences increased 2.2 per cent from a year earlier in the first 20 days of January, according to data released on Jan 22 by the Trade Ministry. Headline exports fell 1 per cent. Overall imports declined by 18.2 per cent, resulting in a trade shortfall of US$2.6 billion (S$3.5 billion).

The daily average growth for the first 20 days compares with the full-month daily average growth of about 14 per cent in December.

South Korea’s exports emerged from a year-long slump in late 2023, led by a pickup in memory chip prices and demand for products including petrochemicals and displays. Chip exports rose about 20 per cent in the latest period.

Should that trend hold, South Korea’s exports will probably rise by 7.9 per cent in 2024, while imports increase 3.3 per cent, according to forecasts by the Korea International Trade Association.

South Korea is a major player in international commerce, and the role its industries play in worldwide supply chains makes its trade data a leading indicator for global consumer demand. Jan 19’s data offers signs of a slow recovery after a prolonged period during which higher interest rates weighed on sentiment.

Cars shipped 2.6 per cent more compared with the same period in 2023, the customs office said. Shipments of steel products fell 7.4 per cent, while wireless communications devices sold 24.2 per cent less. Exports of ships jumped 89.8 per cent.

The United States overtook China in December as South Korea’s largest export destination, indicating a potential shift in economic ties as political tensions between Washington and Beijing reshape global trade.

For the first 20 days of January, China regained its position as the biggest buyer of South Korean goods, accounting for 20.4 per cent. The US took 18.6 per cent, the second most, the customs office said.

Economic woes in China are among headwinds affecting South Korea’s trade. A raft of major elections across the world will contribute to geopolitical uncertainties for commerce as well.

Exports to China edged up 0.1 per cent from a year earlier, customs data showed. Shipments to the US increased 3.6 per cent and those to Taiwan jumped 21.4 per cent. Exports to the European Union dropped 9.4 per cent, while those to Japan fell 4.1 per cent. REUTERS