Although you should read this, you can't now. Instead, read how to fix urban water prices and promote wholesale water markets, but don't forget to read good analysis of bureaucratic barriers to improvement.
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Waterfind e-newsletter – Wednesday, 8 September 2010
Water prices and trading behaviour
The price of temporary water for the Murray and Murrumbidgee systems has remained below $100 for the season to date, continuing the low pricing points observed at the end of the 2009-10 season. August had seen prices in the Murray of around $70/ML. However, there has been a fall in prices in the past week to around $50/ML following the recent allocation increases to NSW, Victorian and South Australian licences along with heavy rainfall. Buying demand is spread across all Murray states at present, as growers build water stores for the start of the irrigation season. The figure below provides an overview of Murray and Murrumbidgee allocation pricing for the past 15 months.
In the permanent market, trades in the past month for Victorian high reliability water have been between $1,400 and $1,500 per ML, although the market for this entitlement type is highly variable depending on the volume and zone of the entitlement. NSW Murray entitlements are holding at higher prices of just below $2,000, reflecting the recognition by buyers of its ability to yield higher allocations.
Waterfind advises that it currently has 521 ML of Murray system allocation sell orders priced at $55/ML and below. Please call 1800 890 285 or login to your Waterfind account at http://www.waterfind.com.auto make a purchase.
Rainfall and storages
August provided high rainfall across the Murray Valley and the upper parts of the catchment with most areas receiving above average to very much above average rainfall for the month according to the Bureau of Meteorology (see figure below). The start of September has also seen heavy rainfall with areas in the upper Murray in NSW and the Murrumbidgee receiving over 70 mm, and Victorian Murray and Ovens catchment accumulating over 100 mm. Some sites exceeded this amount, for example, Mt Hotham has received over 150 mm for the start of the month.
Stream flows rose during August as the catchments have remained wet and this has continued off the back of the wet start to September, which is traditionally one of the highest rainfall months in the year for the upper catchment of the Murray Valley. Heavy rainfall at the start of September has resulted in major flooding of some towns in northern Victorian catchments and at least minor flooding in NSW.
The MDBA had reported that Inflows to Dartmouth Dam in late August had averaged 6,600 ML/day, while inflows to Hume Dam were 19,300–26,600 ML/day. These inflow rates have now been exceeded as a result of the heavy rainfall in early September, with inflows to Hume Dam peaking at over 60,000 ML/d and Dartmouth at over 25,000 ML/d in recent days. Both storages are continuing to rise with Hume Dam at 65% of capacity.