What type of risks are included in production risks?

Production risks pertain to the uncertainties and potential hazards that can directly affect the agricultural output and the overall yield of commodities. Weather-related issues, such as droughts, floods, and extreme temperatures, are significant factors that can severely impact crop production. Additionally, health factors, including pests and diseases that affect plants or livestock, also fall under this category. These risks are inherent in the agricultural sector, as production depends heavily on environmental conditions and the health of the crops or animals involved in the process.

In contrast, market volatility and investor confidence relate to market risks, which involve the fluctuation of commodity prices and the overall trading environment. Technological advancements and innovations represent opportunities that can enhance production efficiency but are not risks in themselves. Long-term economic stability pertains to broader economic conditions affecting various sectors and is more related to macroeconomic risks. Hence, identifying weather-related issues and health factors as components of production risks accurately reflects the main challenges faced in the agricultural production process.