Office of Commercial Affairs,
Royal Thai Embassy in Korea
- Despite global slowdown, cars, chips and machinery expected to fare well
Date: November 29, 2010
Source: JoongAng Daily
Though economic growth for Korea is expected to slow down next year, industry sectors such as semiconductors and automobiles are going to show strong performances, according to an industry outlook report released by the Federation of Korean Industries yesterday.
“The global economy that hit a bottom is recovering very slowly,” the federation said, noting that next year’s global economic growth rate will be around the 3 percent level. “Though it is highly unlikely that there will be a double dip recession or another financial crisis, the lingering market instability will limit economic growth for many developed nations as well as emerging nations.”
Amid such a global outlook, Korea’s economic growth rate is expected to reach near 4 percent, a little higher than the global average, according to the federation, led by a group of industries.
“The semiconductor industry is forecast to be in a favorable condition next year, led by an increase in domestic and overseas demand for smart-phones and tablet personal computers,” the federation said, noting that the outlook for the automobile sector is also bright as local automakers are increasing exports based on their improved brand images.
The machinery industry is also expected to perform well because there is a steady demand for facility replacement by companies.
According to the Korea Automobile Manufacturers Association, this year’s domestic sales for automakers are expected to increase by 4 percent to 1.45 million units compared to the previous year, and exports will increase 28 percent to 2.75 million units led by increased demand mainly from the United States and emerging nations.
Next year will be even better. “Next year, around 10 new cars will be released,” the federation said. Despite concerns that Korean cars will lose price competitiveness due to a strong won, a variety in product selection will increase domestic sales by 3 percent and exports by 5 to 7 percent in 2011, it said.
The semiconductor sector is also roaring. According to the federation, sales for the industry are to jump 39.1 percent this year reaching $302 billion. Local semiconductor manufacturers’s market share is expected to increase from last year’s 11.2 percent to 13.2 percent, and next year the momentum will continue.
Date: November 30, 2010
Source: Mail Economic Newspaper
Flour producers and sugar companies are in agony as international prices of flour and raw sugar soar. Manufacturers of the two products find it difficult to raise prices despite deteriorating profitability.
“Flour and sugar are used for making bread, biscuits and instant noodles, which are popular among low-income households,” a government official said. “If flour and sugar companies raise prices, it is going to cause a chain reaction and affect these products in the end.” Recently, flour was included in a list of 48 items whose prices the government is closely monitoring.
According to industry sources, flour prices stand at $7 per bushel, a 70 percent increase from the first half of this year. The price of flour from Australia and the United States, which supply flour to domestic companies, skyrocketed to $10 per bushel.
International prices for raw sugar also climbed three times to 30 cents per pound beginning in September. The increase in prices of flour and raw sugar is attributed to a weakening dollar and growing demand in China.
However, Korean flour and sugar companies are not reflecting the increase in their prices. Flour producers have continued to cut prices since 2008.
The accumulated decrease in flour prices is between 21 percent and 32 percent. The price for sugar in Korea stands at 1,196 won ($1) per kilogram and is 20 percent to 30 percent lower than that of the average price for countries in the Organization for Economic Cooperation and Development.
Meanwhile, the profitability of flour and sugar companies is rapidly deteriorating.
CJ Cheiljedang saw its third quarter operating profit drop 31 percent from a year ago. DongA One, a flour producer, also saw its operating profit decline to 5.5 billion won from 8.3 billion won.
“Flour companies are barely making a profit,” said an official at an association of local flour companies.
“They will be able to avoid losses if they raise their prices at least early next year, but they are afraid of the government’s reaction.”
Date: November 302010
Source: JoongAng Daily
Korean Trade Minister Kim Jong-hoon and U.S. Trade Representative Ron Kirk will meet in Columbia, Md. for two days starting tomorrow to try to finalize the Korea-U.S. free trade agreement, according to the Ministry of Foreign Affairs and Trade yesterday. he two sides failed to meet a deadline set by Presidents Lee Myung-bak and Barack Obama, who wanted to finish the deal before the recent G-20 Summit in Seoul.
The two sides are expected to revisit the issues that have held the deal in limbo since it was signed in 2007. The U.S. side has continuously asked Korea for concessions concerning automobiles and beef.
In a recent press briefing by Deputy Trade Minister Choi Seok-young, Choi hinted that both sides may show give-and-take concerning autos and possibly other sectors.
However, Choi maintained that beef is a non-FTA issue, and that such non-issues have not been discussed even once at the negotiating table.
In the original agreement, the U.S. agreed to wipe out its 2.5 percent tariffs on Korean automobiles, and Korea in return promised to eliminate its 8 percent tariffs on U.S. automobiles.
The U.S. wants an extension on lifting the 2.5 percent tariffs, as well as an easing of environmental regulations.
By lifting or easing auto regulations agreed upon in the original FTA, Korea may win concessions in other sectors such as medical supplies, agricultural products and textiles.
The U.S. beef issue is likely to be dealt with, if at all, as a “side issue” instead of a main issue. U.S. Chamber of Commerce President and CEO Thomas Donohue hinted as much during a meeting in Seoul on Nov. 10.
Meanwhile, Korea’s opposition parties strongly oppose additional talks, warning that the Korean government is making excessive concessions. The parties have said they will oppose the deal at all costs.
Date: December 1, 2010
Source: Korea Herald
As Korea prepares to celebrate its 47th Trade Day today, the Korea International Trade Association (KITA) said that exports are expected to reach a record high this year, with the country becoming the world’s seventh-biggest exporter.
KITA estimates that Korea will have a record surplus of $42 billion as exports are expected to rise by 28.2 percent to $466 billion and imports by 31.2 percent to $424 billion.
Meanwhile, the state-run Korea Trade-Investment Promotion Agency (Kotra) said yesterday that Korea’s exports are expected to exceed $500 billion next year for the first time, with total trade volume likely to breach the $1 trillion mark.
Exports will increase 11.3 percent in 2011, a slower pace than this year because of the renewed global economic problems.
“The G-20 Seoul Summit and Business Summit were successfully held with strong participation by the Korean people, and I was surprised at the level of interest and support that the public showed,” said KITA Chairman SaKong Il.
SaKong said the country’s achievements would not have been possible without the successful outcome of the G-20 Summit.
“If there had not been international cooperation in the G-20 forum, Korea’s exports would have again marked a negative growth this year instead of a 28 percent increase,” he said.
“The success of the G-20 in Seoul greatly affects our trade. If the G-20 did not exist, Korea would struggle because the country is highly dependent on trade.”
Both KITA and Kotra said that developing countries will be driving the export growth of semiconductors, liquid crystal displays, electronics and auto parts since their economies are expanding at a faster rate than developed countries.
“In terms of the trade balance, our imports have not yet recovered to the level before the recent economic crisis, but our exports have contributed greatly by exceeding the level before the crisis,” said Lee Kyung-tae, president of KITA’s Institute for International Trade.
“For our exports to continue to produce good results, we need to create a strategy that would result in a balanced increase in exports to both advanced and developing countries.”
For next year, KITA forecasts that exports will grow 10.7 percent to $516 billion and imports will grow 14.4 percent to $485 billion, which would make Korea the ninth country to have a total trade volume that exceeds $1 trillion.
It predicted that the trade surplus will fall to $31 billion because of a double-digit increase in imports. KITA said that trade conditions would improve if the currency stabilizes and new free trade agreements with the EU and Peru are fully utilized.
- Stronger won led to imports outpacing exports, say analysts
Date: December 2, 2010
Source: Hanykyung Economy
Korea’s trade surplus nearly halved in November from the previous month, although it remained in the black for the 10th consecutive month, the Ministry of Knowledge Economy said yesterday.
The November trade surplus of $3.6 billion was sharply down from a revised surplus of $6.48 billion posted in October as import growth outpaced that of exports due to a rise in the value of the won, according to analysts.
Exports rose 24.6 percent to $42.4 billion from a year ago, while imports increased by 31.2 percent to $38.8 billion.
“Despite the recent artillery attack by the North on Yeonpyeong Island, Korea’s exports expanded last month,” the ministry said, noting that exports exceeded the $42 billion mark for the third time this year and were the second highest posted after October’s record amount of $43.4 billion.
The semiconductor and auto industries were the biggest contributors to overseas shipments. Semiconductor exports rose by 36.3 percent and that for autos by 21.8 percent. Other industries that experienced sharp export growth included machinery by 59.7 percent, auto components by 46.1 percent, steel by 33 percent and flat screens by 8.9 percent. During the first 20 days of November, exports to Japan rose by 80.2 percent, the U.S. and China by 25.2 percent each, and Asean countries by 32.5 percent.
Exports to the European Union fell by 6.1 percent in an apparent reflection of the ongoing debt crisis in the region. The rise in Korea’s import demand was due to increased inflows of raw materials, including crude oil by 41.9 percent and natural gas by 43.9 percent; capital goods, including memory chips by 51.6 percent and silicon wafers by 56.9 percent; and consumer goods, including beef by 39.6 percent, corn by 33.3 percent and cosmetics by 21.1 percent.
“The on-month decrease in exports is mainly due to a drop in overseas shipbuilding orders - from $4.8 billion to $3.4 billion - while the increase in imports over the same period is due to a surge in crude oil - from $5.9 billion to $6.3 billion - and natural gas - from $1.8 billion to $2.3 billion,” the ministry said. Korea’s exports from January to November increased around 30 percent compared to the previous year, reaching $424.3 billion.
The figure has already surpassed the country’s annual record of $422 billion reached in 2008. The ministry expects Korea’s annual trade surplus to reach a record high of $41 billion in 2010 with exports exceeding $465 billion. The country’s total export volume from January to September ranked as world’s seventh-largest for the first time, going up two notches from last year’s ninth place, according to the World Trade Organization. “We expect the country’s exports to shrink somewhat in December from last month, but they will still reach $40 billion,” said Kim Kyung-Sik, deputy minister for trade and investment policy.
Date: December 3, 2010
Source: Yonhap News
Korea’s consumer inflation rate eased a little in November from the previous month as prices of fresh farm produce fell, Statistics Korea said yesterday.
The consumer price index rose 3.3 percent last month from a year earlier, rising at a slower pace than in October when the price increased 4.1 percent. The November figure is also lower than the 3.6 percent rise for September.
On a month-on-month basis, consumer prices fell 0.6 percent in November from the previous month.
The decline in consumer inflation may ease pressure on the Bank of Korea to raise the key interest rate this month after it hiked rates by 25 basis points to 2.5 percent last month. This year’s overall consumer inflation rate is expected to be less than 3 percent.
“The average inflation rate is very unlikely to exceed 3 percent,” said Yang Dong-hee, a director of Statistics Korea. This is well within the central bank’s target range of between 2 percent and 4 percent.
“The prices of farm products dropped significantly in November from the month before while public utility price also fell, contributing to a stabilization in the consumer price,” Lee Yong-jae, a director of the Ministry of Strategy and Finance’s economic policy department, said in a statement.
Prices of grains and fishery products increased a little, but prices of vegetables dropped considerably as the supply of Napa cabbage and radish expanded in November.
The price of Napa cabbage fell 58.3 percent and that for radishes dropped 34.6 percent in November compared to the previous month. The price of green onions declined 19 percent while the lettuce price fell 44.6 percent.
Napa cabbage prices soared in late September because of poor harvest caused by frequent rains this year, resulting in public complaints.
Napa cabbage is a main ingredient for kimchi. Napa cabbage prices soared to 12,410 won ($10.80) per head on Sept. 29 but gradually fell to 3,614 won on Oct. 29.
The price for Napa cabbage was 3,657 won on Nov. 29.
Although the prices of farm products fell from a month earlier, the report still showed that prices for fresh produce increased from a year ago. Fresh farm produce prices soared 37.4 percent on-year last month.
Source : http://www.depthai.go.th