KUALA LUMPUR—World natural rubber (NR) prices are falling despite a deficit in world supply, according to the May 2017 issue of Natural Rubber Trends & Statistics, the official publication of the Association of Natural Rubber Producing Counties (ANRPC).
World NR supply was nearly 600,000 metric tons in deficit from January to May 2017, said ANRPC Secretary General Nguyen Ngoc Bich in his message at the beginning of the May issue, dated June 13, 2017.
By the end of June, the ANRPC anticipates that deficit to grow to approximately 700,000 tons, Mr. Nguyen said.
Because of this, the ANRPC has revised its 2017 world supply figure downward from a month ago, to 12.756 million tons from April's 12.771 million tons, according to Mr. Nguyen. The downward path of prices is likely to discourage NR farmers from planting and tapping, he said.
"Physical prices of NR are increasingly dominated by sentiments in Shanghai and TOCOM (Tokyo Commodities Market) futures, which are vulnerable to fluctuations in currencies, crude oil prices and geopolitical developments," Mr. Nguyen wrote.
"These observations point to the increasing vulnerability of natural rubber prices to factors external to its demand and supply."