Agricultural Product Derivatives - Malawi

Malawi

Highlights

The nominal value in the Agricultural Product Derivatives market is projected to reach US$2.28bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 5.08% resulting in a projected total amount of US$2.92bn by 2029.
The average price per contract in the Agricultural Product Derivatives market amounts to US$0.01 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 82.55k by 2029.

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Agricultural Product Derivatives market in Malawi is experiencing a notable shift in recent years.

Customer preferences: Customers in Malawi are increasingly turning to agricultural product derivatives as a means of diversifying their investment portfolios and managing risk. The appeal of these financial instruments lies in their potential for high returns and the opportunity to speculate on price movements without directly owning the physical commodities.

Trends in the market: One prominent trend in the Malawian Agricultural Product Derivatives market is the growing interest in derivatives linked to key agricultural commodities such as maize, tobacco, and tea. Investors are drawn to these products due to the significant role agriculture plays in the country's economy. Additionally, the market has seen an uptick in the trading volume of agricultural derivatives, indicating a heightened level of activity and interest among market participants.

Local special circumstances: Malawi's heavy reliance on agriculture as a primary source of income and employment underscores the importance of agricultural product derivatives in the country. Farmers, traders, and other stakeholders in the agricultural sector often use these derivatives to hedge against price fluctuations and mitigate the impact of market volatility. Moreover, the government's efforts to promote agricultural development and improve market efficiency have further fueled the demand for these financial instruments.

Underlying macroeconomic factors: The stability of Malawi's economy, coupled with the government's commitment to agricultural growth, has created a favorable environment for the Agricultural Product Derivatives market to thrive. As the country continues to focus on enhancing its agricultural productivity and expanding its export market, the demand for derivatives linked to agricultural commodities is expected to remain strong. Additionally, ongoing reforms in the financial sector and improvements in regulatory frameworks are likely to attract more investors to the market, further driving its growth.

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.