Four out of ten exporters expect raw material prices to rise again this year

A survey revealed that a large number of South Korea's major exporters expect troubles ahead for this year due to rising raw material prices and supply chain disruptions.

The Federation of Korean Industries (FKI) said on Sunday that 42.7% of the 150 companies that responded to the survey among the top 1,000 companies in terms of sales (excluding those in the financial services sector) predicted an increase in global raw material prices this year.

Of the responding companies, 4.7% saw that raw material prices would rise "very much," while 38.0% answered that they would rise "somewhat." The share of respondents who said it would be a level similar to last year was 29.3%, while 28.0% said it would be slightly down.

As for the most cited factors for rising raw material prices, drawn-out geopolitical risks such as the war in Ukraine (28.1%) and increased demand after the end of the COVID-19 pandemic (28.1%) were picked.

It was followed by concerns about a rise in the won-dollar exchange rate due to continued US monetary tightening (26.6%), increased new demand due to the emphasis on carbon neutrality and eco-friendliness (9.4%), and increased difficulty in securing raw materials due to the rising tide of protectionism (4.7%).

As for the reasons for expecting lower prices, predictions for a global economic recession (54.8%) accounted for the highest portion, followed by excessively high current raw material prices (28.6%) and reduced geopolitical risks (9.5%).

Write to Han-Shin Park at phs@hankyung.com