Water prices to ease in the Murray-Darling Basin
The southern Murray-Darling Basin market is valued at over $14 billion but according to the latest Water Markets Report from Aither, Australia’s leading water markets advisor, allocation trade turnover was well down on the previous year.
Irrigation entitlement prices were reported to have remained at record highs last year despite the low returns in selling allocations in 2016-17 because of wet seasonal conditions but declined steadily across the year to close on 30 June 2017, at about $40 per ML.
Given the high level of supply, Mr Olszak expressed surprise allocation prices had opened so strongly. “Based on Aither’s modelling, unless very dry conditions prevail through spring and summer, we expect these prices to ease,” Mr Olszak said.
The fourth annual Aither report also highlighted the increased sophistication of water market participants, so irrigators who have an improved understanding of water asset management are more likely to benefit from better business outcomes.
Alister Walsh, Director of Duxton Asset Management, says that the report highlights the maturity that we are seeing in the market, both from the types of water supply products that are being offered but also in the way that irrigators are beginning to use those products to better risk manage their water supply.
South Australian irrigators live and operate in a highly variable climatic part of the world and are regularly a net importer of allocation from NSW and Victoria on an annual basis.
“It has never been more important for South Australian irrigators to have an understanding of the connective nature of our River Murray Water Markets and an understanding of the industry drivers and competition for the available water resource.”
Join Alister in a Free 1 Day Workshop on Managing Your Water Asset held in Murray Bridge on 19 Sep, designed specifically for the South Australian Agriculture Industry and facilitated by ICE WaRM, in collaboration with PIRSA and others.
View the full Aither Water Markets Report
Marsden Jacob Water Market 2017-18 Outlook and 2016-17 Review
Alister Walsh profile and radio interview