Containers and cranes stand at the Port of Pyeongtaek in Seoul. South Korea’s exports grew 2.5% to $51.8bn in October from a year earlier and imports fell 3% to $44.3bn, the ministry of trade said yesterday.

Reuters

Seoul

South Korean exports rose slightly faster than expected in October but imports saw their sharpest drop in 13 months, dragged down by softer demand for raw materials and capital goods,  data showed yesterday.

Shipments were mainly propped up by demand from the United States and China, while consumer goods imports gained, easing concerns over a slow recovery in domestic spending.

Exports grew 2.5% to $51.8bn in October from a year earlier and imports fell 3% to $44.3bn, the Ministry of Trade, Industry and Energy said yesterday. Imports fell by the sharpest annual pace since a 3.5% decline in September 2013.

This resulted in a trade surplus of a record $7.5bn, compared to a $3.4bn surplus in September.

The median forecasts from a Reuters survey were for exports from Asia’s fourth-largest economy to grow 1.9% in October from a year earlier and imports to rise by 0.6%.

“In the case of November, there will be a few negative factors like fewer working days, slowed recovery in Europe and Japan and conflict in the Ukraine area but if this trend carries on we expect trade volume this year to surpass $1tn towards the end of the month,” said the trade ministry in a statement.

“We forecast South Korea will post record trade volume and exports this year.”

The trade ministry data showed imports of consumer goods had risen 7.6% in the first 20 days of October on-year, compared to 3.4% and 9% drops in raw materials and capital goods over the same period, respectively. The average export value per working day stood at $2.25bn in October, compared with a revised $2.27bn in September, Thomson Reuters calculations showed.

Breakdowns on export figures by destination showed shipments to China rose for a second straight month, gaining 3.7% on-year in October from a 6.5% gain in September.

Exports to the US continued to grow strongly, jumping 25% in October, the fastest gain seen since March 2012.

But demand from the European Union slumped as its economy sputtered, with exports falling 8.6% last month on annual terms in the sharpest decline since September last year.

China is South Korea’s largest export market, taking about one-quarter of total shipments by the smaller neighbour, followed by the United States and the European Union.

By product, electronics goods account for more than one-fifth of South Korea’s total exports, followed by chemical products and industrial machinery.

South Korea is the world’s seventh-largest exporter and the first major exporting economy to report foreign trade data each month, making its trade figures a useful guide on the current strength of global demand.

Last week, data showed the economy expanded by 0.9% in the third quarter from the previous quarter, rebounding from a 0.5% rise in the second quarter. But industrial output was almost flat in September, and was well short of market expectations, adding to uncertainties over its tentative economic recovery.