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If you are planning to trade water, you need to keep an eye on the status of the trade limits that might affect you. Where you can trade will affect the market price that you can buy or sell water for.
The Goulburn to Murray allocation trade limit is currently in place while the Goulburn inter-valley trade account exceeds 200 GL. More information on understanding this rule was provided on 22 December 2017, including other information on what affects the limit and how to get further information on it. You can read more here.
What trade is possible?
The Goulburn to Murray trade limit is currently limiting allocation trade into Murray accounts. However, while allocation trade is not permitted, people can still use water in the Victorian Murray from a tagged Goulburn account. The Victorian trading rules do not currently limit use from tagged accounts because it does not always have the same impact as allocation trade.
Sellers of Goulburn allocation should be aware that it can currently be purchased by Murray customers with tagged accounts. Goulburn allocation sellers should consider the market price of Murray allocation when deciding their selling price.
Murray customers should be aware that if they purchase or hold allocation in tagged Goulburn accounts and do not use this water in the current season they must have a Goulburn water share to be able to carry it over in their Goulburn account.
Will tagged accounts always be managed in this way?
Victoria needs to make sure water markets continue to develop to match the level of demand and sophistication in the market.
Recent information collected by the government on trends in the water market indicates that the volume of water being moved through tagged accounts is becoming larger. With this change in the use of tagged accounts, existing trade rules may need to be reconsidered.
Customers with tagged allocation accounts or who are intending to set up a tagged allocation account should be aware that Victoria is currently considering options to restrict use under tagged accounts in line with the relevant trading rules. Victoria supports the consistent and equitable application of restrictions to different forms of trade when the impact of water moving between valleys is the same.
This work is part of meeting Victoria’s commitments to improve trading rules in northern Victoria under action 9.6 of Water for Victoria and to prevent any adverse impacts of water trade between valleys. The increased pressure on water supplies and changing demands for water in recent years mean that water markets are now operating in a very different environment. Water for Victoria action 9.3 commits the government to continued vigilance in monitoring water markets and understanding trends to make sure the trading rules continue to meet growing demand and sophistication.
Victoria is also currently working with the Murray-Darling Basin Authority (MDBA) to better understand how the Basin Plan trading rules for tagged accounts should be implemented in Victoria and to make sure trade rules continue to support the efficient functioning and ongoing maturing of water markets in the Murray-Darling Basin as part of good business practice and continual improvement. This includes continuing to work with the MDBA to better understand how the inter-valley account may be delivered and how this impacts on trade opportunity.
Monitoring the Goulburn to Murray allocation trade opportunity
Allocation trade into Murray accounts is currently subject to the trade limit. New allocation trade opportunities can reopen during the season if the inter-valley trade balance decreases below the 200 GL limit.
The balance can reduce for a variety for reasons, for example if the MDBA as the river manager calls water out from the inter-valley trade account to supply the Murray. When this happens, the change to the inter-valley trade account balance occurs at 10 am the day after call out has been recorded and accounted for by the Northern Victorian Resource Manager. For the rest of this season, the Resource Manager will be accounting for this on Tuesdays and Thursdays, with updated balances made public at 10 am on Wednesdays and Fridays.
The inter-valley trade balance can also increase. This can happen for many reasons, including if there is allocation trade out or use of water from tagged accounts.
Current loading of use from tagged accounts is expected to cause the inter-valley trade account balance to remain above 200 GL for the next few weeks, despite call out of the account by the MDBA. Use from tagged accounts is typically loaded incrementally but a large volume will be added in one batch this week to update use for lower Murray account holders who requested to use their tagged accounts for the first time recently.
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