Water

Trade limits impacting water price

by
November 10, 2017

With summer approaching and southern Murray-Darling Basin allocation trade prices trending well in excess of $100/Ml there is significant interest in whether prices will drive higher over the coming months or ease back to 2016-17 levels.

With summer approaching and southern Murray-Darling Basin allocation trade prices trending well in excess of $100/Ml there is significant interest in whether prices will drive higher over the coming months or ease back to 2016-17 levels.

David Barthold from Ruralco said irrigators were closely watching the current trading restrictions between river systems across the southern connected basin, as these may well have a significant impact on local prices.

‘‘It is important for irrigators to understand and take into consideration the various trading opportunities when planning their water strategies for the current season,’’ Mr Barthold said.

‘‘In particular, irrigators should pay attention to the inter-state and inter-valley trade accounts that regulate trade capacity between regions and subsequently alter the supply/demand dynamic.’’

One inter-valley trade currently impacting price is the Goulburn to Murray inter-valley trade.

This trade account is currently closed to downstream trade from Goulburn to Murray.

Reportedly, ‘‘this has come about due to season transfers and adjustments resulting in the trade-out limit of 200Gl being reached and subsequently halting trade,’’ Mr Barthold said.

‘‘Restriction of trade has significantly impacted both river systems with the Goulburn now trading at a lower price than the Murray,’’ he said.

‘‘It is likely this price disparity will continue through the season until water held in Goulburn storages is drawn on to supplement peak demand in the Murray.’’

Mr Barthold said once the Goulburn to Murray trade gate reopens, it was anticipated competition would be stiff for downstream trade capacity as water owners seek to shift carryover water to the Murray and beyond or to chase higher Murray prices.

‘‘Given the potential for further trade account changes to adversely impact price over the summer months, irrigators may choose to trade now as a a hedge against unfavourable price movements.

‘‘Irrigators interested in trade should also monitor IVT balances for trade from NSW to Victoria, downstream through the Barmah Choke and between the Murrumbidgee and NSW Murray.’’

So far this season trade between the Murray and Murrumbidgee has operated without restriction.

Mr Barthold said this might soon change as net trade has been into the Murrumbidgee.

‘‘If this trend continues and the inward trade limit is reached, the Murrumbidgee IVT will close to further inward trade which would limit supply options and put pressure on the Murrumbidgee temp water price,’’ he said.

‘‘Unlike the Murrumbidgee/Murray IVT, allocation trade through the Barmah Choke has been limited due to trade restrictions.

‘‘Although the Barmah Choke is currently closed and trade only allowed by way of back trade opportunities, prices are currently holding in the isolated upstream Murray.

‘‘Trade from NSW to Victoria is currently possible, allowed from NSW Murray below the Barmah Choke to and from SA to Victorian Murray and Goulburn irrigators.’’

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