The new dynamism behind the Oz water rights market

Turnover in Australia’s water rights market fell by 50% from around A$3 billion (US$3.1 billion) in 2009-10 to A$1.5 billion (US$1.5 billion) in the 2010-11 trading year, according to new figures released today by the National Water Commission.

Trade in permanent entitlements fell by 40%, with prices falling by 10%, reflecting both seasonal conditions and the Commonwealth Government’s change to smaller lots of environmental water purchases. There was also a 21% fall in the average allocation price to A$118/1,000 m³.

The volume of allocation trades, meanwhile, rose by 40% as the drought eased, and irrigators traded their water allocations in large volumes to those who had the capacity to store water for future seasons.

According to National Water Commissioner Laurie Arthur, “irrigators are employing increasingly sophisticated strategies to meet their changing water requirements and generate income from their water rights assets”.