From mid-January to mid-February the temporary water market in the Southern Connected Basin dropped by up to $300 a megalitre in some valleys, a response to rain events and Inter Valley Trade opportunities.
Subscribe now for unlimited access to all our agricultural news
across the nation
or signup to continue reading
However, the dip in the market didn't last long, prices rising back to $675/ML in the NSW Murray Below Choke and Murrumbidgee early this week after less than positive allocation outlooks were released by both NSW and Victoria governments.
Aither director, Chris Olszak said it was hard to understand why the prices dropped by so much initially, as the rainfall had not had a significant impact on inflows to southern NSW storages.
"There's been the opening of the IVTs (Inter Valley Trade) from the Goulburn and Murrumbidgee which certainly influenced availability but it seemed like everyone just decided to sell at the same point," he said.
He said he believed by the time the irrigation period was over, storages would be below what they were at the same time last year.
This sentiment was echoed by the latest NSW and Victorian Water Allocation Statements, released on Monday.
The NSW government confirming Hume and Dartmouth dams combined were 1,050,000 ML lower than this time last year and predicted that the 2020/2021 water year would open on zero per cent again on the Murray.
Marsden Jacob consultant, Simo Tervonen said he thought the market would have been anticipating the unfavourable allocation outlooks.
"I think those who had the ability to purchase some water last week at relatively low prices, compared to what they've been at least, might have seen it as a pretty tempting opportunity," Mr Tervonen said.
"They were anticipating prices to jump up again this week after the outlooks were released and that's exactly what happened."
Water broker Tom Wilks of Wilks Water said the most interest during the dip in prices last week, was from permanent planters who still needed water for this season.
While, the dismal starting allocations predicted early this week had been a further call to action.
"Permanent planters are now thinking about next season and carryover," Mr Wilks said.
However, Mr Tervonen said the latest outlook did give southern irrigators some level of confidence that carryover water would not be restricted in the NSW Murray and Murrumbidgee valleys next water year.
The government indicating that a high security allocation of 95 (Murrumbidgee) / 97 (Murray) pc and carryover commitments would be met.
"I think if they had predicted carryover would be restricted next water year, the market would have jumped more significantly," Mr Tervonen said.
