New "weather index" is launched to hedge risk

11th May 2007, Comments 0 comments

PARIS, May 10, 2007 (AFP) - France's national weather service and the market Euronext launched a scheme on Thursday aimed at helping companies anticipate risks from abrupt changes in the weather.

PARIS, May 10, 2007 (AFP) - France's national weather service and the market Euronext launched a scheme on Thursday aimed at helping companies anticipate risks from abrupt changes in the weather.

Metnext, a joint venture of Meteo-France and the subsidiary of NYSE Euronext, aims at giving "customised indices" to individual firms that will advise them about upcoming weather risk.

The garment industry, makers of soft drinks and ice-cream, farmers and energy producers are just a few of the sectors that can be badly affected by sharp changes in temperature and rainfall.

In industrialised countries, between 20 and 30 percent of gross domestic product (GDP) are exposed to adverse weather, and the proportion rises to 70-80 percent if indirect effects are taken into account, said Meteo-France.

In September 2006, an exceptionally hot month, 82 percent of consumer purchases were linked to weather factors, it said.

In the European heatwave of 2003, sales of icecream and beer surged but purchases of chocolate plummeted.

Meteo-France holds a 65 percent stake in Metnext and Euronext the remaining 35 percent.

Metnext's customised indices will be based on historical data such as temperature, rainfall, direction and speed of wind, to compile forecasts for periods ranging from a few days to several weeks or months, depending on the company's needs.

In April, the bank UBS launched "global warming index" based on weather futures for 15 US cities, a data net that will be expanded to other cities around the world.


Copyright AFP

Subject: French news

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