By PNA / Yonhap and U.S. News Agency / Asian

South Korea’s trade surplus rose to a 21-month high in June as overseas demand for South Korean products grew while the country’s imports shrank, the government said Sunday.

The country’s trade balance came to US$ 4.96 billion in the black last month, up from a US$ 2.4-billion surplus tallied in May, according to the Ministry of Knowledge Economy.

Exports rose 1.3 percent from a year earlier to US$ 47.35 billion in June, ending a three-month losing streak.
Imports, on the other hand, shrank 5.4 percent on-year to US$ 42.39 billion, continuing a year-on-year drop for the fourth consecutive month since February, according to the ministry.

The country’s trade surplus rose to the highest level since October 2010 as a result. June also marks the fifth consecutive month the country has recorded a trade surplus since January when the country’s trade balance went into the red for the first time in 24 months, posting a deficit of US$ 1.96 billion.

The ministry attributed the large drop in imports mainly to falling oil prices, a major import item, for South Korea.

“In the case of oil, the amount of shipments to South Korea rose slightly from the same month last year, but the total amount of money spent on oil imports recorded a slight decline from a year earlier due to recent drops in international oil prices,” it said in a press release.

In the first six months of the year, South Korea’s exports rose 0.7 percent from the same period in 2011 to reach US$ 275.38 billion.

The country posted a trade surplus of US$ 10.74 billion in the January-June period with its imports growing 2.5 percent on-year to US$ 264.64 billion.

“The growth of the country’s exports slowed significantly in the first half of the year due to an economic slowdown in Europe and China,” the ministry said, noting exports in the first six months of 2011 had grown 23.6 percent on-year.

South Korea’s shipments to China in the first six months of the year dropped 1.2 percent on-year to about US$ 59.41 billion, a sharp turnaround from a 16.6 percent hike in the same period last year.

Exports to European Union countries during the cited period plunged 16 percent from the same period in 2011.

The ministry said such conditions in the global market will continue, if not worsen, at least for some time in the second half of the year.

“Exports this year are expected grow (3.5 percent on-year) to US$ 574.5 billion, significantly down from an earlier estimate due to worsening outside conditions,” it said.

The government earlier predicted the country’s exports for the whole of 2012 to grow 6.7 percent from last year to US$ 595 billion.

The ministry forecast the country’s imports to grow 5 percent on-year to US$ 551 billion, instead of the 8.7 percent growth earlier predicted.