(2nd LD) S. Korea's Jan. exports plunge record 32.8 pct

(ATTN: UPDATES with more details, comments in paras 5-7, 9-13)
By Lee Joon-seung
SEOUL, Feb. 2 (Yonhap) -- South Korea's exports plunged a record 32.8 percent in
January from a year earlier as the worldwide economic slump cut into overseas
demand for locally made goods, a government report showed Monday.

The country's exports reached US$21.7 billion, with imports decreasing 32.1
percent to $24.6 billion for a trade deficit of $2.9 billion, according to the
report by the Ministry of Knowledge Economy.
The export drop is the steepest since the country started announcing monthly
tallies in 1980, while the drop in import numbers is the steepest since July
1998. The deficit is also a turnaround from a trade surplus of $542 million in
December.
The ministry said exports of most products posted negative growth, with
automobiles, car parts, computers and consumer electronic goods contracting by
more than 50 percent compared to the year before. Only ships managed to increase
exports by 20 percent.
"Besides the general drop off in demand around the world, a reduction in the
number of working days due to the Lunar New Year holidays, and production cuts by
carmakers and electronic companies to deal with rising inventory contributed to
the drop in exports," said Chung Jae-hoon, head of the ministry's trade and
investment promotion office. He stressed that while there were 2.5 less working
days last month than the year before, many manufacturers halted production for up
to 10 days.
Exports to most countries also fell into negative territory last month with
outbound shipments to China and the European Union (EU) nosediving 32.2 percent
and 46.9 percent in the cited month. Shipments to the United States and Japan
fell 21.5 percent and 29.3 percent, respectively, the report said.
"Shipments to the EU fell since there were no ship deliveries in January, with
numbers for China dropping off as most Chinese workers took extended holidays for
the Lunar New Year, which is celebrated in many Asian countries," the official
said.
Imports, meanwhile, fell last month as South Korean demand for foreign consumer
and capital goods fell more than 20 percent.
Cold weather, however, caused imports of gas to go up 51 percent and imports of
coal to rise 62 percent last month from a year earlier. Overall drop in
international crude oil prices caused imports of this key resource to decrease 46
percent on-year.
On future prospects, the ministry said that exports may continue to face an up
hill battle in the near future with global trade volume likely to contract 2.8
percent in 2009 from a gain of more than 4 percent last year.
It said, however, that for February a rough balance of trade may be reached since
outstanding orders by shipyards may help push exports in this sector by over 70
percent.
Policymakers also said they did not plan to readjust the official export target
of $450 billion until after the first quarter and maintained that a trade surplus
was possible for 2009 since imports will likely be hurt more than exports.
South Korea, which relies heavily on exports to fuel growth, reported a trade
deficit of $13.3 billion last year from a surplus of $14.6 billion in 2007. For
this year, the government is aiming for a surplus of around $11 billion.
yonngong@yna.co.kr
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