A new report on trends in the Victorian water market is now available, providing important insights into current trends in water trade as well as factors impacting the price of allocation water.

Early in the 2015/16 irrigation season, irrigation communities in northern Victoria expressed concerns about high water prices, and asked for information about the impact of environmental water recovery and the role of speculators in influencing water prices.

This report provides an analysis of data in the Victorian Water Register on trends in the water market over the past 10 to 15 years, and trade patterns between different water users in recent seasons.

The report shows that the water market was used to maintain the value of Victoria's regional agricultural production, even in the millennium drought. Many farmers have used the water market to make decisions about their own water needs.

Water availability has been an important influence on allocation prices, which briefly peaked at more than $1000/ML in the millennium drought and dropped to less than $20/ML in the wet years.

Water ownership has changed in 15 years, with the amount of water owned for consumptive use reducing as more water was bought for the environment. Importantly, private ownership of water not tied to land has hardly changed since 2009 and is now at about seven per cent. Contrary to some views, the report finds there’s no evidence that speculators are having a significant impact on the market.

Further reports on water trading, including the Victorian Water Trading Annual Report are also available here, and up to date market data on the volume and price of water allocation trade is available here.