Agricultural Product Derivatives - Costa Rica

Costa Rica

The nominal value in the Agricultural Product Derivatives market is projected to reach US$25.88bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of -2.84% resulting in a projected total amount of US$22.41bn by 2029.
The average price per contract in the Agricultural Product Derivatives market amounts to US$0.17 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached in the United States (US$12,320.00bn in 2024).
In the Agricultural Product Derivatives market, the number of contracts is expected to amount to 177.20k by 2029.

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Analyst Opinion

Costa Rica, known for its lush landscapes and diverse agriculture, has seen a notable development in its Agricultural Product Derivatives market.

Customer preferences: Investors in Costa Rica are increasingly turning to Agricultural Product Derivatives as a way to diversify their portfolios and hedge against market volatility. The appeal lies in the potential for significant returns and the opportunity to participate in the global commodities market without directly owning physical assets.

Trends in the market: One prominent trend in Costa Rica is the growing interest in coffee and sugar derivatives. Given that coffee and sugar are key agricultural exports for the country, investors are closely monitoring market trends and leveraging derivatives to capitalize on price fluctuations. Additionally, there is a rising demand for derivatives linked to tropical fruits like pineapples and bananas, reflecting the country's strong position in the global fruit market.

Local special circumstances: Costa Rica's stable political environment and commitment to sustainable agriculture make it an attractive destination for agricultural investments. The country's focus on organic farming practices and eco-friendly initiatives further enhances the appeal of Agricultural Product Derivatives linked to environmentally conscious agricultural products. Moreover, Costa Rica's strategic location and access to international markets contribute to the growth of its derivatives market.

Underlying macroeconomic factors: The macroeconomic landscape in Costa Rica, characterized by steady economic growth and a well-developed financial sector, provides a conducive environment for the expansion of Agricultural Product Derivatives. As the country continues to attract foreign investment and diversify its economy, the derivatives market is poised to benefit from increased participation and liquidity. Additionally, government policies supporting agricultural innovation and market competitiveness play a crucial role in shaping the dynamics of the derivatives market in Costa Rica.

Methodology

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.