Saudi Arabia commodities market: Size, Opportunity Analysis and Industry Forecast, 2024-2029

Saudi Arabia commodities market Overview

The Saudi Arabia Commodities Market report offers a comprehensive analysis of the industry’s current trends, growth drivers, and future outlook. In 2024, the market is valued at US$40.88 billion, with a projected CAGR of 4.86% (2024-2029), reaching US$51.82 billion by 2029. This report delves into key market segments, including agricultural products, energy products, industrial metals, and precious metals, examining their value and volume trends.

The report highlights the growing interest in commodity derivatives, spurred by Saudi Arabia’s strategic position as a major oil producer and the government’s diversification efforts under Vision 2030. It also explores the influence of macroeconomic factors, such as global oil price fluctuations, GDP growth, and currency exchange rates, on market performance.

The report emphasizes readability and keyword optimization. It is an essential resource for stakeholders seeking actionable insights into market opportunities, investment trends, and competitive dynamics. Whether you are an investor, analyst, or policymaker, this report provides valuable data and expert opinions to support strategic decision-making in the Saudi Arabia commodities market.

Market Report Coverage:

The “Saudi Arabia commodities market Report—Future (2024-2029)” by Digiroads Research & Consulting covers an in-depth analysis of the following segments in the market.

Study Assumptions and Definitions

This study on the Saudi Arabia Commodities Market is based on a robust methodology incorporating key assumptions and precise definitions to ensure accuracy and reliability. The analysis focuses on commodity derivatives, including futures and options, with metrics such as notional value, number of contracts, and open interest serving as foundational data points.

Market Scope: The study covers four primary segments: agricultural products, energy products, industrial metals, and precious metals. The data includes local and global factors influencing these segments, such as economic diversification initiatives, oil price fluctuations, and global trade dynamics.

Key Assumptions:

• Economic indicators like GDP growth, consumer spending, and currency exchange rates are critical drivers.
• Forecasts are based on the HOLT-damped Trend method, factoring in historical trends and emerging market dynamics.
• Commodity prices are converted to USD using average yearly exchange rates for standardization.

Data Sources: Data is derived from reputable institutions, including the World Bank and World Federation of Exchanges, supported by regional statistics.

Exclusions: Non-derivative commodity trades and informal markets are out of scope.

This precise framework ensures actionable insights for stakeholders seeking to navigate the evolving commodities market in Saudi Arabia effectively.

Market Scope

The Saudi Arabia Commodities Market report encompasses a detailed analysis of the country’s commodity derivatives market, focusing on four primary segments: agricultural products, energy products, industrial metals, and precious metals. The study evaluates the notional value, number of contracts, average price per contract, and open interest for these segments.

Key elements include the rising popularity of commodity derivatives like futures and options, driven by Saudi Arabia’s strategic role as a leading oil producer and its economic diversification initiatives under Vision 2030. The report also examines the influence of global oil price fluctuations, macroeconomic factors, and investor preferences on market dynamics.

The scope excludes non-derivative trades and informal markets, ensuring precision in analysis. This comprehensive coverage provides investors, analysts, and policymakers with actionable insights into the current trends, growth potential, and strategic opportunities within the Saudi Arabian commodities market.

MARKET OUTLOOK

Executive Summary

The Saudi Arabia Commodities Market is poised for robust growth, with its notional value projected to increase from US$40.88 billion in 2024 to US$51.82 billion by 2029, at a CAGR of 4.86% (2024–2029). This growth is driven by the country’s strategic initiatives under Vision 2030, aiming to diversify the economy beyond oil dependency, and the increasing popularity of commodity derivatives such as futures and options.

Key market segments include agricultural products, energy products, industrial metals, and precious metals, each influenced by distinct factors. Energy products dominate due to Saudi Arabia’s position as a leading oil producer, while precious metals and industrial metals attract investors seeking portfolio diversification and hedging opportunities. Agricultural products, though smaller in scale, contribute to broader market dynamics.

The report highlights a growing trend toward trading commodity derivatives, fueled by investor interest in leveraging price movements without owning physical assets. Macroeconomic factors, such as global oil price volatility, GDP growth, inflation rates, and currency exchange fluctuations, play a significant role in shaping market performance.

Regionally, Saudi Arabia’s commodities market is aligned with global developments, though its economic stability and proactive government policies provide a unique edge. The adoption of advanced trading platforms and regulatory reforms further supports market transparency and accessibility.

This comprehensive report provides actionable insights for stakeholders, including investors, policymakers, and market participants, detailing opportunities, challenges, and growth prospects. By analyzing market trends, value developments, and key indicators, the report serves as a critical resource for navigating the evolving landscape of the Saudi Arabia commodities market.

Designed for ease of understanding and decision-making, this report is a valuable tool for anyone looking to capitalize on the market’s dynamic growth trajectory.

COMPETITIVE LANDSCAPE

The Saudi Arabia commodities market is moderately fragmented, with regional and multinational players competing fiercely for market share.

Key Market Players

• Saudi Aramco
• Tadawul Group (Saudi Exchange)
• SABIC (Saudi Basic Industries Corporation)
• National Agricultural Development Company (NADEC)
• Al Rajhi Capital
• SAMBA Capital
• Alinma Investment
• Riyad Capital
• HSBC Saudi Arabia

Market Share Analysis

The Saudi Arabia Commodities Market is dominated by a few key players, with a significant share held by energy-related companies due to the country’s position as a global oil powerhouse. Saudi Aramco leads the market, particularly in crude oil and natural gas derivatives, benefiting from its market dominance and the global reliance on Saudi oil. This segment is crucial in shaping the market’s overall value and volume.

The Tadawul Group (Saudi Exchange) plays a central role in facilitating commodity trading through futures and options, with a growing share in agricultural products and industrial metals. The market share of precious metals is also substantial, driven by investor demand for safe-haven assets like gold and silver. Companies like Al Rajhi Capital and SAMBA Capital have strong positions in these sectors, offering commodity-linked investment solutions.

SABIC and other industrial players contribute significantly to the industrial metals segment, holding a considerable portion of the market share, particularly in base metals like aluminum and copper.

Overall, while energy products dominate, precious metals and agricultural products continue to grow in importance, reflecting investor diversification trends. The market is expected to evolve with increasing participation from financial institutions and regulatory changes that support transparency and innovation, providing opportunities for market share redistribution.

MARKET DYNAMICS

Market Drivers and Key Innovations

The Saudi Arabia Commodities Market is driven by several key factors, reflecting both local dynamics and global trends:

1. Oil Price Fluctuations: As one of the world’s leading oil producers, Saudi Arabia’s commodities market is significantly influenced by fluctuations in global oil prices. The price of crude oil directly impacts energy derivatives and investor sentiment in the market. Saudi Arabia’s role in OPEC and its policy decisions also shape global commodity trends.
2. Economic Diversification: Under Vision 2030, Saudi Arabia is working to reduce its dependence on oil. This shift has led to an increased focus on commodities beyond energy, such as precious metals and industrial metals, driving growth in these sectors. SABIC and other industrial giants are leading innovations in metals and chemicals.
3. Investor Preferences: There is a growing trend toward commodity derivatives as a form of alternative investment. Investors are increasingly turning to futures and options to speculate on price movements or hedge risks, contributing to market growth.
4. Technological Advancements: Innovations in trading platforms and financial instruments are improving market accessibility and efficiency. The rise of digital commodities trading platforms, backed by blockchain technology, is enhancing transparency and reducing transaction costs.
5. Regulatory Changes: The Saudi government’s ongoing regulatory reforms, including measures to enhance market liquidity and transparency, are encouraging both local and international investors to participate in the commodities market.

Market Challenges

1. Oil Price Volatility: The Saudi commodities market remains highly sensitive to fluctuations in global oil prices, which can lead to market instability and unpredictable returns.
2. Geopolitical Risks: Regional tensions and geopolitical uncertainties can impact investor confidence and disrupt trade flows, especially in energy commodities.
3. Overdependence on Energy Products: Despite diversification efforts, the market is still heavily reliant on energy products, particularly crude oil, limiting the growth potential of other commodity segments.
4. Regulatory Uncertainty: Although reforms are underway, the evolving regulatory landscape can create uncertainties for investors and market participants, affecting long-term planning.
5. Competition from Global Markets: Saudi Arabia faces competition from other global commodity hubs, such as the U.S. and China, which may reduce its share in global commodity trading.
6. Market Liquidity: The lack of liquidity in certain segments, particularly in agricultural and industrial metals, can make trading more challenging and increase volatility.
7. Technological Barriers: While digital trading is growing, there may still be technological gaps in infrastructure and security, hindering the adoption of innovative trading solutions.
8. Currency Fluctuations: The impact of exchange rate movements, particularly against the U.S. dollar, can affect pricing, investor returns, and overall market stability.

Market Opportunities

1. Economic Diversification: As Saudi Arabia moves away from oil dependency under Vision 2030, there are growth opportunities in sectors like industrial metals, agricultural products, and precious metals.
2. Increased Demand for Commodity Derivatives: The growing popularity of commodity futures and options trading provides opportunities for financial institutions to expand their offerings and attract more investors.
3. Technological Advancements: The rise of digital trading platforms, blockchain technology, and AI-driven market analysis can enhance efficiency, transparency, and security, attracting tech-savvy investors.
4. Regional Hub for Commodity Trading: Saudi Arabia’s strategic location and robust financial infrastructure position it as a potential regional hub for commodities trading, particularly for energy products and metals.
5. Investment Diversification: As investors seek to hedge against market volatility, commodities such as gold and industrial metals offer attractive options, providing market players with opportunities to develop new investment products.
6. Sustainability Trends: With increasing global focus on sustainability and renewable energy, there are opportunities for Saudi Arabia to develop markets for green commodities like clean energy derivatives and sustainable agriculture.
7. Regulatory Reforms: Ongoing regulatory improvements present opportunities for creating a more transparent, secure, and investor-friendly market, boosting confidence and attracting international players.
8. Export Potential: Saudi Arabia’s strong position in energy exports, along with growing diversification in other sectors, offers opportunities to expand its footprint in the global commodities market.

RECENT STRATEGIES & DEVELOPMENTS IN THE MARKET

• Economic Diversification Initiatives (Vision 2030):
  Saudi Arabia is actively diversifying its economy under Vision 2030, focusing on reducing oil dependency. This strategy is increasing investments in non-energy commodities like industrial metals, agriculture, and precious metals. The market is expected to see a CAGR of 4.86% from 2024-2029, reflecting these efforts.
• Developmenutures and options trading platforms, increasing accessibility for both local and international investors. This move aligns with Saudi Arabia’s aim to become a regional financial hub, with plans to boost liquidity in the market.
• Regulatory Reforms:
  Saudi Arabia has implemented new regulatory measures to improve market transparency and efficiency, fostering a more favorable environment for commodity derivatives trading. The Saudi Capital Market Authority (CMA) has introduced reforms to support trading in green commodities and other sustainable assets.
• Technological Innovation:
  The introduction of blockchain technology in commodity trading is being explored to enhance transparency, reduce transaction costs, and streamline processes. Digital trading platforms are expanding, offering innovative solutions for efficient trading of futures and options.
• Increased Foreign Investment:
  The government’s focus on market liberalization and creating an investor-friendly environment is attracting international players. HSBC Saudi Arabia and Riyad Capital have reported an uptick in participation from foreign investors, particularly in energy and metal commodity derivatives.
• Focus on Renewable Energy Commodities:
  With global sustainability trends, Saudi Arabia is positioning itself to play a larger role in renewable energy commodities. This includes investments in solar power and green hydrogen, with expectations to create new markets for these commodities.t of Financial Markets:
  The Tadawul Group (Saudi Exchange) is enhancing its commodity f

KEY BENEFITS FOR STAKEHOLDERS

1. Increased Investment Opportunities:
   Stakeholders can benefit from a broad range of commodity derivatives (futures and options) in energy, industrial metals, agriculture, and precious metals, providing diversification and hedging options against market volatility.
2. Market Growth and Expansion:
   With a projected CAGR of 4.86% from 2024-2029, stakeholders have the opportunity to tap into the growth of an evolving market driven by economic diversification under Vision 2030, creating new avenues for investment and profit.
3. Improved Market Access:
   The development of more advanced trading platforms and digital infrastructure enhances market accessibility for both local and international investors, offering a more efficient and transparent trading environment.
4. Regulatory Support:
   Ongoing regulatory reforms aim to enhance market transparency, liquidity, and investor protection, providing stakeholders with a secure and stable environment for investing and trading.
5. Strategic Positioning in a Regional Hub:
   Saudi Arabia’s strategic location, combined with its growing financial infrastructure, positions stakeholders to benefit from its status as a regional hub for commodities trading, particularly in energy products and metals.
6. Opportunities in Renewable Commodities:
   As Saudi Arabia focuses on sustainability, stakeholders have the chance to invest in emerging green commodities, such as solar energy and green hydrogen, which are expected to grow in demand globally.
7. Higher Returns on Diversified Portfolios:
   The growing interest in commodity derivatives allows stakeholders to leverage diverse investment options, potentially yielding higher returns by capitalizing on price fluctuations across multiple commodity sectors.

At DigiRoads Research, we emphasize reliability by employing robust market estimation and data validation methodologies. Our insights are further enhanced by our proprietary data forecasting model, which projects market growth trends up to 2029. This forward-thinking approach ensures our analysis not only captures the current market landscape but also anticipates future developments, equipping stakeholders with actionable foresight.

We go a step further by offering an exhaustive set of regional and country-level data points, supplemented by over 60 detailed charts at no additional cost. This commitment to transparency and accessibility allows stakeholders to gain a deep understanding of the industry’s structural and operational dynamics. By providing exclusive and hard-to-access data, DigiRoads Research empowers businesses to make informed strategic decisions with confidence.

In essence, our methodology and data delivery foster a collaborative and data-driven decision-making environment, enabling businesses to navigate industry challenges and capitalize on opportunities effectively.

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Table of Contents

• INTRODUCTION

  • Market Overview
  • Years Considered for Study
  • Market Segmentation
  • Study Assumptions and Definitions
  • Market Scope

• RESEARCH METHODOLOGY

• MARKET OUTLOOK

  • Executive Summary
  • Market Snapshot)

• Market Segments 

• Agricultural Products:

Includes commodities such as grains, livestock, and other farm-produced goods.

• Energy Products:

Covers commodities like crude oil, natural gas, and renewable energy derivatives.

• Industrial Metals:

Focuses on base metals such as aluminum, copper, and zinc, which are critical for industrial use.

• COMPETITIVE LANDSCAPE

  • Recent Strategies (Key Strategic Moves)
  • Market Share Analysis
  • Company Profiles
    • Saudi Aramco
    • Tadawul Group (Saudi Exchange)
    • SABIC (Saudi Basic Industries Corporation)
    • National Agricultural Development Company (NADEC)
    • Al Rajhi Capital
    • SAMBA Capital
    • Alinma Investment
    • Riyad Capital
    • HSBC Saudi Arabia  

• MARKET DYNAMICS

  • Market Drivers
  • Market Challenges
  • Market opportunities
  • Porter’s Five Forces’ Analysis
    • Bargaining Power of Suppliers
    • Bargaining Power of Buyers
    • Threat of New Entrant
    • Threat of Substitutes
    • Competitive Rivalry

• GLOSSARY OF PROMINENT SECODNARY SOURCES

• DISCLAIMER

• ABOUT US