Agricultural Product Derivatives - Saudi Arabia

Saudi Arabia

The nominal value in the Agricultural Product Derivatives market is projected to reach US$6.00bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 5.25% resulting in a projected total amount of US$7.75bn 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 617.90k by 2029.

Market

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Analyst Opinion

The Agricultural Product Derivatives market in Saudi Arabia is experiencing a notable growth trajectory driven by various factors.

Customer preferences: Investors in Saudi Arabia are increasingly turning to agricultural product derivatives as a means of diversifying their portfolios and hedging against market volatility. 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 of the key trends in the Agricultural Product Derivatives market in Saudi Arabia is the growing interest in trading contracts linked to staple crops such as wheat, barley, and corn. This trend is partly fueled by the country's efforts to enhance food security and reduce reliance on imports by incentivizing domestic agricultural production. Additionally, the introduction of new derivative products tailored to the preferences of local investors is further driving growth in the market.

Local special circumstances: Saudi Arabia's unique position as a major player in the global oil market also influences the dynamics of its Agricultural Product Derivatives market. The government's initiatives to diversify the economy away from oil have led to increased focus on the agriculture sector, spurring demand for related financial instruments. Moreover, the country's large sovereign wealth funds and institutional investors play a significant role in shaping the development of the derivatives market.

Underlying macroeconomic factors: The overall economic stability and growth prospects of Saudi Arabia play a crucial role in shaping the Agricultural Product Derivatives market. Favorable government policies, regulatory reforms, and infrastructure development efforts are creating a conducive environment for market participants to engage in derivative trading. Additionally, the increasing integration of Saudi Arabia into the global financial system is opening up new opportunities for investors to access a wider range of agricultural derivatives products.

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.