S. Korea's exports expected to hit record high of $320 bln in 2006: report

South Korea's annual exports are expected to reach US$320 billion this year, the highest amount ever, despite the won's strength against the U.S. dollar and high oil and raw material prices, a state-run trade agency's report showed Sunday.

In line with the record growth, South Korea's exports in the second half of the year will likely come to $164.2 billion, up 11.1 percent annually, the Korea Trade Investment Promotion Agency (KOTRA) said.

The record annual exports will be driven by growing shipments to emerging markets of Brazil, Russia, India, China and other developing nations, it said.

Quality improvements in domestic products will also contribute to the increase, KOTRA said in the report compiled from research on 231 foreign importers of South Korean goods in 30 nations and 203 South Korean companies overseas.

Exports to Brazil, Russia, India and China are likely to rise 35 percent, 34 percent, 27 percent and 16 percent, respectively, from a year earlier, it said.

Shipments to Japan are expected to increase 10 percent on Japan's steady economic recovery despite the won's gain against the yen. Exports to major developed nations such as Germany and Britain will likely rise an average 5 percent.

Exports to the United States, however, are likely to inch down 1 percent due to a set of factors in the U.S. such as an interest rate hike, high oil prices and downturn in the real estate market.

The won's strength to the dollar, intensified competition against Chinese products in the U.S. market and increased local production will also reduce exports to the U.S., the report showed.

In terms of items, outbound shipments of auto parts will likely surge 30 percent to 40 percent thanks to increased outsourcing orders from the U.S. to South Korean companies.

Textile and computer exports will likely decline by up to 10 percent on heightened competition and the hollowing out of domestic companies from overseas production bases. Exports of steel products are expected to remain stagnant in all major markets of China, Japan and the U.S., according to the report.

Seoul, July 2 (Yonhap News)