Agricultural Product Derivatives - South Africa

South Africa

Highlights

The nominal value in the Agricultural Product Derivatives market is projected to reach US$91.27bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 4.88% resulting in a projected total amount of US$115.80bn by 2029.
The average price per contract in the Agricultural Product Derivatives market amounts to US$0.25 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 354.30k by 2029.

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Agricultural Product Derivatives market in South Africa is experiencing a significant shift in dynamics, driven by various factors influencing customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Customers in South Africa are increasingly turning to Agricultural Product Derivatives as a means of diversifying their investment portfolios and hedging against market uncertainties. The appeal of these derivatives lies in their potential for high returns and the opportunity to speculate on price movements without owning the physical commodity.

Trends in the market: The market for Agricultural Product Derivatives in South Africa is witnessing a growing interest from institutional investors, who are attracted to the potential for significant profits in a relatively short period. Moreover, the introduction of innovative derivative products tailored to the agricultural sector is further fueling this trend. As the market continues to mature, more sophisticated trading strategies and risk management tools are being adopted by market participants.

Local special circumstances: South Africa's unique agricultural landscape, characterized by a diverse range of crops and livestock, presents both opportunities and challenges for Agricultural Product Derivatives. The seasonal nature of agricultural production, coupled with external factors such as weather conditions and government policies, significantly impact derivative prices and trading volumes in the market. Market participants need to closely monitor these local special circumstances to make informed trading decisions.

Underlying macroeconomic factors: The performance of the Agricultural Product Derivatives market in South Africa is closely linked to broader macroeconomic indicators such as inflation rates, interest rates, and currency fluctuations. Economic stability, government interventions, and global market trends also play a crucial role in shaping the overall sentiment and direction of the market. As investors navigate through these macroeconomic factors, the demand for Agricultural Product Derivatives is expected to remain robust in South Africa.

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.