SEOUL, Feb 1: South Korea’s trade surplus narrowed sharply in January to just $48 million from $704 million in December, hit by a surge in the country’s oil import bill, the Commerce Ministry said on Saturday.

The ministry said rising oil prices were threatening the trade balance in South Korea, one of Asia’s biggest economies and the world’s fourth-biggest oil importer.

At more than $30 a barrel, world oil prices reached their highest in more than two years in January, bolstered by fears of war in Iraq and a general strike in oil exporter Venezuela.

Imports rose 27.4 per cent to $14.44 billion in January while customs-cleared exports were up 27.3 per cent at $14.49 billion.

South Korea sources more than 70 per cent of its crude imports from the Middle East and imports all of its crude needs.

Average crude import prices rose 3.1 per cent in January from December and were up 40.6 per cent from January 2002, the ministry said.

The crude import bill amounted to $2.06 billion in January, up 18.3 per cent, or $319 million, from a month earlier and up 43.1 per cent, or $621 million, from a year ago.

The semiconductor sector spearheaded growth in January exports, climbing 54 per cent from a year earlier to $1.77 billion. Auto industry exports gained 21.2 per cent to $1.36 billion.

Exports in mobile telephone handsets and other wireless telecommunications equipment jumped 42.2 per cent to $1.25 billion.

Exports of $1.45 billion to the United States were 10.6 per cent higher than a year earlier, despite a slow recovery in the world’s largest economy.—Reuters