Commodities - Nepal

Nepal

The nominal value in the Commodities market is projected to reach US$49.06bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 4.80% resulting in a projected total amount of US$62.02bn by 2029.
The average price per contract in the Commodities market amounts to US$0.12 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached in the United States (US$53,690.00bn in 2024).
In the Commodities market, the number of contracts is expected to amount to 440.60k by 2029.

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Analyst Opinion

The Commodities market in Nepal has been experiencing a notable shift in recent years, with various factors influencing its development. Customer preferences in Nepal are increasingly leaning towards diversifying investment portfolios, leading to a growing interest in Commodities trading.

Investors are looking for alternative options to traditional stock markets, seeking higher returns and risk management through exposure to Commodities. Trends in the market indicate a rise in participation from both retail and institutional investors in Nepal. This increased activity is driven by the growing awareness of Commodities as an asset class and the potential for hedging against inflation and economic uncertainties.

Moreover, technological advancements have made it easier for investors to access and trade in the Commodities market. Local special circumstances, such as the limited availability of investment options and the nascent stage of the financial market in Nepal, have contributed to the growing popularity of Commodities trading. Investors are exploring new avenues for investment, and Commodities offer a promising opportunity for diversification and risk management in a developing financial landscape.

Underlying macroeconomic factors, including economic growth, inflation rates, and government policies, play a significant role in shaping the Commodities market in Nepal. As the economy continues to expand and evolve, investors are seeking ways to capitalize on emerging trends and opportunities, with Commodities serving as a viable option for potential returns. Overall, the Commodities market in Nepal is witnessing a transformation fueled by changing customer preferences, market trends, local circumstances, and macroeconomic factors.

This shift reflects a broader movement towards exploring new investment avenues and adapting to the evolving financial landscape in the country.

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.