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Trade terms worsen in Nov. on oil price hike, weak chip prices

15:03 December 29, 2022

SEOUL, Dec. 29 (Yonhap) -- South Korea's terms of trade worsened in November mainly because net exports prices fell at the fastest pace in 2 1/2 years amid high oil prices and weak chip prices, central bank data showed Thursday.

The nation's net terms-of-trade index for goods came to 84.04 last month, down 4.9 percent from a year earlier, according to the preliminary data from the Bank of Korea (BOK).

The index has been on a decline for the past 20 months.

The net terms-of-trade index is calculated by dividing the index for export prices by that for import prices. It shows the amount of imports a country can buy for each unit of exports, with a lower figure meaning worse trade terms.

The sharp decline in trade terms came as the price index of exports fell 11.3 percent last month from a year ago.

It is the largest on-year drop since May in 2020 when the index posted a 25 percent decline.

The price index of exports of electronic, computer and optical goods plunged 25.4 percent due to weak chip prices and increased oil costs.

The export price indices for primary metal and chemical products also decreased by 21.7 percent and 17 percent, respectively, during the cited period. Those of textiles and leather shrank 19 percent.



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