S. Korea's trade surplus hits record US$6 bln in April

(ATTN: UPDATES with more details, comments in paras 5-17, 20)
By Lee Joon-seung
SEOUL, May 1 (Yonhap) -- South Korea's trade surplus reached a record US$6
billion in April mainly due to a sharp drop in imports and favorable exchange
rates, a government report showed Friday.

The country's exports reached $30.6 billion last month, falling 19.0 percent
on-year, with imports plummeting 35.6 percent to $24.6 billion, according to the
Ministry of Knowledge Economy.
The monthly surplus surpassed the previous record of just under $4.3 billion
tallied for March, and is much higher than the $3.8 billion reported for April
1998 when the country was struggling to cope with the Asian financial crisis by
cutting back on spending.
For the first four months of this year, South Korea exports reached $105.4
billion, with imports reaching $95.8 for a surplus of $9.5 billion. The ministry
said ship sales soared 39.9 percent annually, with liquid crystal display exports
moving up 2.3 percent.
Steady sales of ships have been the leading source of the country's trade surplus
this year.
Outbound shipments for petrochemicals, steel, semiconductors, mobile
communication devices and consumer electronics fell short of numbers reached the
year before, but the extent of the shortfall has decreased vis-a-vis March,
according to the ministry.
Semiconductors, which are a major export item for the country, posted a
contraction of 26 percent on-year from a 38 percent drop posted the month before.
The ministry said exchange rates that stood at an average 1,336 won to the U.S.
dollar last month made locally made products cheaper abroad. For the whole of
2008, the exchange rate was 1,103 won to the greenback.
On imports, a fall off in international raw materials prices continued to reduce
purchasing outlays for crude oil, natural gas and steel.
Import prices for crude oil were down 51 percent annually, with steel and gas
prices posting 49 percent negative growth.
"Despite the drop in volume, last month trade report card shows promise with
exports surpassing the $30 billion mark for the first time since October, with
the daily average exceeding 1.2 billion for the first times in five months," said
Lee Dong-geun, deputy minister of trade and investment promotion.
He also said that the $2.6 billion increase in exports compared to the previous
month is a good sign, although it is premature to say that exports will reach
last year's levels.
The official said that size of the surplus was unexpected with Seoul originally
expecting the trade balance to be $4.8-5.0 billion in the black.
"Companies fearing that all trade will be halted in early May due to the many
holidays may have 'pushed' forward shipments," he said.
For May, the trade expert said the trade surplus should fall to a more normal
$4.0-5.0 billion level, with export growth to remain in negative territory.
Lee, however, expressed concerns that the size of the surplus is raising concerns
because it was reached become companies did not import.
"In particular, the 30.6 percent on-year drop in capital goods could limit export
growth down the road," he said, stressing the Seoul did not seek an excessively
large surplus and wanted to see balanced growth in both exports and imports.
The provisional tally taken for the first 20 days of the month, meanwhile, showed
exports to Oceania gaining 110.3 percent year-on-year, with numbers for the
European Union falling 1.0 percent.
Exports to the United States, China and Japan were down 19-34 percent annually
during the cited month as the economic crisis dampens consumer demand and
business investments.
The ministry added that while it is carefully monitoring the fallout of the
outbreak of the new type-A flu virus sweeping the globe, it impact has not been
felt so far among local companies.
yonngong@yna.co.kr
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