NZX is considering rainfall futures, which would give investors a hedge against extreme weather.

The NZX launched a dairy futures market last year and chief executive Mark Weldon said this week that products tracking NZX equity market indexes and one other commodity product may be added.

He expected to announce the details in the next two to three weeks.

An NZX spokeswoman said rainfall futures was being “knocked around” as an idea but it was at a formative stage.

The CME Group in Chicago launched rainfall futures contracts last year.

It already offers contracts based on snowfall, frost and hurricanes which allow investors to hedge against extreme weather events.

The NZX already produces a pastoral growth index, which includes rainfall statistics.

– Homepage image / Mark Weldon, photo by Mark Mitchell

– NZ Herald Business