Agricultural Product Derivatives - Pakistan

Pakistan

Highlights

The nominal value in the Agricultural Product Derivatives market is projected to reach US$3.83bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of -1.05% resulting in a projected total amount of US$3.63bn by 2029.
The average price per contract in the Agricultural Product Derivatives market amounts to US$0.15 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 25.20k by 2029.

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

Amidst the growing trend of agricultural product derivatives globally, Pakistan has seen a significant rise in the market for these financial instruments.

Customer preferences: In Pakistan, customers are increasingly turning to agricultural product derivatives as a means to hedge against price volatility in the commodities market. With a growing awareness of the benefits of risk management, investors and farmers alike are showing a keen interest in these financial tools to protect their investments.

Trends in the market: The agricultural product derivatives market in Pakistan is witnessing a surge in activity, driven by factors such as changing weather patterns, government policies, and global market trends. Investors are leveraging these derivatives to capitalize on price fluctuations in key agricultural commodities such as wheat, rice, and cotton. The introduction of new derivative products tailored to the Pakistani market is also fueling growth and innovation in the sector.

Local special circumstances: Pakistan's agricultural sector plays a vital role in the country's economy, employing a significant portion of the workforce and contributing substantially to the GDP. As a result, developments in the agricultural product derivatives market have far-reaching implications for the overall economic stability of the nation. The unique climate conditions and crop cycles in Pakistan create specific opportunities and challenges for market participants, shaping the dynamics of the derivatives market in the country.

Underlying macroeconomic factors: Several macroeconomic factors are influencing the growth of the agricultural product derivatives market in Pakistan. Government initiatives to modernize the agricultural sector, improve infrastructure, and enhance market efficiency are creating a conducive environment for derivative trading. Moreover, the integration of Pakistan's economy into the global market is exposing market participants to international trends and best practices, driving further development and sophistication in the derivatives market.

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.