Agricultural Product Derivatives - Zambia

Zambia

The nominal value in the Agricultural Product Derivatives market is projected to reach US$5.53bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 4.62% resulting in a projected total amount of US$6.93bn by 2029.
The average price per contract in the Agricultural Product Derivatives market amounts to US$0.14 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 38.38k by 2029.

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Analyst Opinion

The Agricultural Product Derivatives market in Zambia is experiencing a notable surge in interest and activity.

Customer preferences: Market participants in Zambia are increasingly turning to agricultural product derivatives as a means of diversifying their investment portfolios and managing risk. This trend is in line with the global movement towards financial instruments that offer exposure to commodity markets without the need for physical ownership.

Trends in the market: In Zambia, the growing demand for agricultural product derivatives can be attributed to several factors. Firstly, the country's agricultural sector plays a significant role in its economy, making derivative products linked to agricultural commodities particularly appealing to investors seeking exposure to this key sector. Additionally, the volatility in global commodity prices has sparked interest in derivatives as a way to hedge against price fluctuations and capitalize on market movements.

Local special circumstances: Zambia's unique agricultural landscape, characterized by a variety of crops including maize, soybeans, and sugarcane, provides a rich foundation for the development of agricultural product derivatives. The country's reliance on agriculture for both domestic consumption and export revenue further underscores the importance of these financial instruments in managing risks associated with price volatility and production uncertainties.

Underlying macroeconomic factors: The macroeconomic environment in Zambia, marked by factors such as currency fluctuations, inflation, and government policies, also influences the Agricultural Product Derivatives market. Investors are turning to derivatives as a way to navigate these challenges and capitalize on opportunities presented by the country's agricultural sector. Additionally, the increasing integration of Zambia into regional and global markets is driving demand for agricultural product derivatives as investors seek exposure to a broader range of commodities and markets.

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.