South Korea's export profitability weakens on lower export prices

Profitability among South Korean exporters continued to worsen last month as export prices fell for three straight months amid the local currency's ascent to the U.S. dollar, central bank data showed Thursday.
In local currency terms, export prices shrank 1.6 percent in May from a month earlier, keeping a downward trend for the third consecutive month, according to the Bank of Korea.
The won/dollar exchange rate averaged 1,024.99 won against the greenback in May, down 1.9 percent from the previous month. The rate fell below the 1,020 level for the first time in almost six years, closing at 1,015.7 won on Wednesday.
Prices for farm goods dipped 0.1 percent last month, but those for industrial goods, which account for a majority of South Korea' s export items, dropped 1.6 percent on a monthly basis.
Import prices retreated 1.7 percent in May from a month earlier due to the stronger won that outweighed a slight hike in global oil prices.
Dubai crude, South Korea's benchmark, averaged 105.62 U.S. dollars per barrel in May, up 0.9 percent compared with the prior month.
Prices for raw materials imported from overseas retreated 1.6 percent in May from a month earlier, and those for intermediate goods slid 1.8 percent last month. Import prices for capital and consumer goods fell 1.8 percent and 1.3 percent respectively.
In contract currency terms, the import prices inched up 0.1 percent last month, indicating the lower prices mainly stemmed from the stronger South Korean currency.