Agricultural Product Derivatives - Nepal

Nepal

The nominal value in the Agricultural Product Derivatives market is projected to reach US$10.54bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 4.41% resulting in a projected total amount of US$13.08bn by 2029.
The average price per contract in the Agricultural Product Derivatives market amounts to US$0.19 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 52.96k by 2029.

Market

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Analyst Opinion

Amidst the picturesque landscapes of Nepal, the Agricultural Product Derivatives market is experiencing notable developments.

Customer preferences: Customers in Nepal are increasingly turning to Agricultural Product Derivatives as a way to hedge against price volatility in the agricultural sector. With a growing awareness of risk management strategies, market participants are showing a preference for derivatives that allow them to protect their investments in agricultural commodities.

Trends in the market: One of the key trends in the Agricultural Product Derivatives market in Nepal is the introduction of new derivative products tailored to the specific needs of local farmers and traders. These customized derivatives are designed to address the unique challenges faced by participants in the Nepalese agricultural sector, thereby driving market growth and participation.

Local special circumstances: Nepal's geographical and topographical diversity, including its varying climatic conditions and agricultural practices, create a unique set of circumstances for the Agricultural Product Derivatives market. As a predominantly agrarian economy, Nepal relies heavily on the performance of its agricultural sector, making the development of effective derivative instruments crucial for risk management and price discovery.

Underlying macroeconomic factors: The macroeconomic landscape in Nepal, characterized by factors such as inflation, exchange rates, and government policies, plays a significant role in shaping the Agricultural Product Derivatives market. Economic stability and regulatory frameworks are essential for the growth of derivatives markets, providing market participants with the confidence and security needed to engage in derivative transactions.

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.