Agricultural Product Derivatives - Ethiopia

Ethiopia

The nominal value in the Agricultural Product Derivatives market is projected to reach US$11.39bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 1.42% resulting in a projected total amount of US$12.22bn by 2029.
The average price per contract in the Agricultural Product Derivatives market amounts to US$0.06 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 184.00k by 2029.

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Analyst Opinion

Ethiopia, known for its rich agricultural heritage, has seen significant developments in its Agricultural Product Derivatives market.

Customer preferences: Customers in Ethiopia have shown a growing interest in Agricultural Product Derivatives as a way to hedge against price volatility in the market. This trend is in line with global practices where investors use derivatives to manage risk and speculate on price movements.

Trends in the market: The Agricultural Product Derivatives market in Ethiopia has been witnessing a steady increase in trading activity. This can be attributed to the growing awareness among market participants about the benefits of using derivatives to manage risk. Additionally, the government's efforts to promote the market and attract more investors have also contributed to this trend.

Local special circumstances: One of the key factors influencing the Agricultural Product Derivatives market in Ethiopia is the country's heavy reliance on agriculture as a primary source of livelihood. With a large portion of the population engaged in agricultural activities, there is a natural demand for tools that can help mitigate risks associated with farming. This unique local circumstance has created a conducive environment for the growth of the derivatives market in the agricultural sector.

Underlying macroeconomic factors: The macroeconomic landscape in Ethiopia, including factors such as inflation rates, GDP growth, and government policies, plays a crucial role in shaping the Agricultural Product Derivatives market. As the economy continues to evolve and diversify, there is a greater need for risk management tools like derivatives to support the agricultural sector and ensure its stability. Additionally, the government's focus on modernizing the agricultural industry and improving productivity has further fueled the demand for derivatives among market participants.

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.