Waiting for a boom

Weather derivatives volumes have soared across the globe, but the Australian market is still waiting for the big bang to occur. Nick Sawyer reports

Weather plays a crucial role in the Australian economy. In a country so dependent on agricultural commodities, an unexpected drought or a deluge of rain can have a crippling effect on crop yields. As such, it’s perhaps surprising that weather derivatives have yet to be wholeheartedly embraced in the Australian market. The mention of weather derivatives still prompts raised eyebrows in some quarters, and while these products are increasingly being adopted by energy companies as a way