EXCHANGE-TRADED DERIVATIVES AS A TOOL FOR RISK MINIMIZATION IN AGRIBUSINESS

Abstract

Relevance. The relevance of the topic is driven by the increasing impact of climate change on the agricultural sector, accompanied by a growing frequency of droughts, temperature anomalies, irregular precipitation, and other natural and climatic risks. Under modern conditions, traditional insurance mechanisms fail to provide an adequate level of financial protection for agribusiness, which necessitates the introduction of innovative financial instruments, particularly weather derivatives, to minimize risks and ensure the financial stability of agricultural enterprises.
The purpose of the article is to study the theoretical foundations and practical aspects of using weather derivatives as a tool for managing climate risks in agribusiness, to analyze the current state of the global weather-related financial derivatives market, and to substantiate the prospects for their implementation in Ukraine.
Methods. The study employed methods of analysis and synthesis, abstraction and generalization, comparative analysis, SWOT analysis, graphical methods, content analysis of scientific sources and regulatory documents, as well as statistical analysis to assess trends in the development of the weather derivatives market.
Results. The study analyzes the essence and classification of climate risks in agribusiness. The specific features of weather derivatives and their role in the risk management system of agricultural enterprises are identified. Current trends in the development of the global weather derivatives market, its regional structure, and the main financial instruments for hedging climate risks are examined. It was established that the market has achieved the highest level of development in the United States and European Union countries. The prospects for the implementation of weather derivatives in Ukraine are substantiated, taking into account modern climate challenges, the development of digital technologies, and the needs of the agricultural sector for financial protection.
Practical value of the study lies in the possibility of using the obtained results for the formation of an effective climate risk management system in agribusiness, improvement of financial protection mechanisms for agricultural enterprises, and development of the weather financial instruments market in Ukraine.
Conclusions. It has been established that weather derivatives are a promising instrument for hedging climate risks in agribusiness, enabling prompt compensation payments, reducing financial uncertainty, and increasing the resilience of agricultural production. At the same time, the development of the weather derivatives market in Ukraine is constrained by the insufficient development of financial infrastructure, regulatory limitations, and the low awareness of agricultural producers regarding the possibilities of using such instruments. Further development of this area requires state support, the advancement of digital technologies, improvement of meteorological monitoring systems, and the integration of international experience in climate risk management.