Export letter of credit (L/C) arrivals in South Korea plummeted a massive 23.8 per cent in October compared with the same month last year according to the Bank of Korea (central bank) which links the fall to the 11 September terrorist attacks.

The central bank said that export L/C arrivals worth US$3.58 billion in October represents the lowest level this year since the US$4.15 billion recorded in January. The fall in export L/C arrivals also marks the 11th straight monthly decline and contributes to South Korea's parlous international trading circumstances.

Third quarter trade figures released by the central bank indicate that net commodity trade terms dropped 11.4 per cent in that period. Export prices - particularly hit by prices falls for semiconductor chips and information and communication equipment - fell sharply by 19.5 per cent in the quarter during which import prices fell by 9.2 per cent.

A central bank official said that the export L/C arrivals fell sharply as shipments to the US, South Korea's major export market, shrank markedly following the terrorist attacks.

The fall in L/Cs is significant for the South Korean economy. Typically they account for between 30-40 per cent of the country's total trade settlements and are recognised as a barometer for export trends likely in the following quarter.

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