Agricultural Product Derivatives - Rwanda

Rwanda

The nominal value in the Agricultural Product Derivatives market is projected to reach US$2.59bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 4.52% resulting in a projected total amount of US$3.23bn 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 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 121.10k by 2029.

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Analyst Opinion

The Agricultural Product Derivatives market in Rwanda has been experiencing a notable growth trajectory in recent years.

Customer preferences: Rwandan customers have shown an increasing interest in agricultural product derivatives as a means of diversifying their investment portfolios and managing risk. This trend aligns with the global movement towards utilizing financial instruments in the commodities market.

Trends in the market: One prominent trend in the Rwandan Agricultural Product Derivatives market is the growing participation of small-scale farmers and agricultural cooperatives. These entities are increasingly using derivatives to hedge against price fluctuations and secure their income. Additionally, there is a rising demand for derivatives linked to key agricultural products such as coffee and tea, reflecting Rwanda's position as a major producer in these sectors.

Local special circumstances: Rwanda's unique position as a landlocked country with a predominantly agrarian economy plays a significant role in shaping the Agricultural Product Derivatives market. The country's vulnerability to external market forces and climate change impacts has driven market participants to seek risk management solutions through derivatives. Moreover, the government's efforts to promote agricultural development and improve market access for farmers have contributed to the market's expansion.

Underlying macroeconomic factors: The macroeconomic landscape in Rwanda, characterized by stable economic growth and ongoing structural reforms, has created a conducive environment for the development of the Agricultural Product Derivatives market. As the country continues to focus on enhancing its agricultural productivity and export competitiveness, the demand for derivatives as a financial tool is expected to grow further. Additionally, increasing integration with regional and global markets is likely to drive innovation and liquidity in the Rwandan derivatives market.

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.