20000402

Korea March trade surplus dips as imports surge

SEOUL: Surging imports as the crisis-hit economy recovers slashed South Korea's trade surplus in March from both a year and a month earlier, the commerce ministry said on Saturday.

A ministry statement said the month's trade account came in at a provisional surplus of $382 million as exports rose 25.3 percent year on year to $14.6 billion while imports increased by 52.8 percent to $14.22 billion.

The surplus represented an 83.8 percent decline from a $2.35 billion surplus in March 1999 and a 50.6 percent drop from a $774 million surplus in February this year.

"The surplus fell from February because oil imports rose both in value and volume while semiconductor exports shrank mainly due to the weak price," the ministry said.

South Korea does not produce crude oil and depends wholly on imports. Crude imports in value rose to $2.12 billion in March from $1.87 billion in February, it said.

The unit export price for mainstay 64-megabit dynamic random access memory (DRAM) chips fell to $5.79 on average from $7.55, the ministry said. South Korea supplies some 40 percent of the world DRAM demand.

The March surplus sharply lowered the country's trade surplus for the first three months to a provisional $746 million, down from a $4.69 billion surplus posted for the comparable three-month period of last year, government data showed.

IMPORTS SURGE AS ECONOMY PICKS UP

The ministry said raw materials and capital goods led the high year-on-year growth in imports during March, confirming the heavy imports were mostly in line with the economy's recovery from its worst recession on record in 1998.

Raw materials imports for the first 20 days of March were up 57.1 percent year on year and those of machinery and other capital goods jumped 45.7 percent. Consumer goods imports rose by a slower 26.9 percent, the ministry said.

Exports were driven by computers, automobiles and petrochemical products. Computer exports during March 1-20 rose 77.5 percent year on year, automobile exports were up 51.6 percent and petrochemicals up 41.2 percent.

South Korea enjoyed brisk exports to most of its major markets, with Japan and the United States leading by buying 35.9 percent and 29.7 percent more worth of Korean products than a year earlier, the ministry said.

GOVERNMENT OPTIMISTIC FOR FUTURE

The commerce ministry said the country's monthly trade surplus was expected to widen from April mainly because the international crude oil price is seen easing.

Nine members of the Organisation of Petroleum Exporting Countries agreed this week in Vienna to increase output by 1.45 million barrels per day from April 1 to curb soaring prices.

An expected rebound in DRAM prices from the second quarter of the year will also help accelerate South Korea's export growth in the coming months, analysts say.

Finance Minister Lee Hun-jai also said earlier this week he was confident the country would achieve this year's trade surplus target set at $12 billion.

"I expect the trade surplus to exceed our earlier expectation of $12 billion," Lee said on Wednesday in a meeting with business executives and government officials at the presidential Blue House.

Last year, South Korea posted a trade surplus of $23.93 billion, compared with a $39.03 billion surplus in 1998. -Reuters