Agricultural Product Derivatives - Sri Lanka

Sri Lanka

The nominal value in the Agricultural Product Derivatives market is projected to reach US$18.53bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 4.66% resulting in a projected total amount of US$23.27bn by 2029.
The average price per contract in the Agricultural Product Derivatives market amounts to US$0.20 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 93.73k by 2029.

Market

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Analyst Opinion

Amidst a backdrop of increasing interest in financial markets, the Agricultural Product Derivatives market in Sri Lanka is experiencing a notable surge in activity.

Customer preferences: Investors in Sri Lanka are showing a growing appetite for agricultural product derivatives, seeking to diversify their portfolios and hedge against market uncertainties. The allure of potentially higher returns compared to traditional investments is drawing more participants into this market segment.

Trends in the market: One prominent trend in the Agricultural Product Derivatives market in Sri Lanka is the rising demand for derivatives linked to key agricultural commodities such as rice, tea, and rubber. As these commodities play a vital role in the country's economy, market participants are closely monitoring global price movements and leveraging derivatives to manage price risks effectively.

Local special circumstances: Sri Lanka's unique agricultural landscape, characterized by a heavy reliance on exports for key commodities, contributes to the specific dynamics of the derivatives market. Fluctuations in global demand and supply, as well as climate-related challenges, drive the need for risk management tools like derivatives among local stakeholders.

Underlying macroeconomic factors: The overall economic environment in Sri Lanka, including factors such as inflation rates, exchange rate fluctuations, and government policies, significantly influences the Agricultural Product Derivatives market. Investors closely track these macroeconomic indicators to make informed decisions regarding their derivative positions in the 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.