Agricultural Product Derivatives - Iceland

Iceland

Highlights

The nominal value in the Agricultural Product Derivatives market is projected to reach US$6.04bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 5.14% resulting in a projected total amount of US$7.76bn by 2029.
The average price per contract in the Agricultural Product Derivatives market amounts to US$0.09 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached United States (US$12.32tn in 2024).
In the Agricultural Product Derivatives market, the number of contracts is expected to amount to 70.31k by 2029.

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Agricultural Product Derivatives market in Iceland is experiencing a shift driven by changing customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Customers in Iceland are increasingly looking for agricultural product derivatives that offer stability and potential for growth in uncertain market conditions. They are gravitating towards derivatives that provide a hedge against price fluctuations and offer opportunities for diversification in their investment portfolios.

Trends in the market: One notable trend in the Icelandic Agricultural Product Derivatives market is the growing interest in derivatives linked to unique agricultural products specific to the region. This includes derivatives related to traditional Icelandic crops and livestock, catering to both domestic demand and potential export markets. Additionally, there is a rising trend in sustainable and environmentally friendly agricultural derivatives, aligning with Iceland's focus on green initiatives and responsible investing.

Local special circumstances: Iceland's geographical location and climate present unique challenges and opportunities for its agricultural sector, which in turn influence the derivatives market. The short growing season, limited arable land, and reliance on geothermal energy for greenhouse cultivation impact the types of agricultural products available for derivatives trading. This necessitates specialized derivatives tailored to the local agricultural landscape and production methods.

Underlying macroeconomic factors: The stability of Iceland's economy, government policies supporting agricultural innovation, and increasing integration into global markets are key macroeconomic factors shaping the Agricultural Product Derivatives market. As Iceland continues to diversify its economy beyond traditional sectors like fishing and tourism, there is a growing emphasis on leveraging the agricultural sector for economic growth, driving demand for agricultural product derivatives as financial instruments for risk management and investment.

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.