Water allocation prices in the southern Murray–Darling Basin are likely to remain low for a third consecutive year, according to the latest ABARES Water Market Outlook.
ABARES Senior Economist Mihir Gupta said the report provides a range of possible allocation prices for 2022–23 in wet, average, dry and extreme dry scenarios.
“Based on the current climate outlook from the Bureau of Meteorology, ABARES considers the average scenario to be the most likely, with prices reaching $80 per ML,” Mr Gupta said.
“In the more favourable wet scenario, prices are forecast to fall further to $57 per ML.
“Substantial volumes of water are expected to be carried over into 2022–23, and with water storages near capacity in the southern Basin, favourable water supply conditions are likely in 2022–23.
“Most major entitlements are forecast to receive 100 per cent allocations under the wet, average, and dry scenarios.
“This will help keep prices low even in the dry and extreme dry scenarios, where prices are forecast to reach $102 per ML and $150 per ML, respectively.”
Mr Gupta said it was unusual to have this much certainty about next year’s water availability this early in the year, allowing irrigators to make more informed planting decisions.
“The continuation of lower water prices will help to support agricultural production, especially commodities which are typically more sensitive to water prices, such as rice and cotton,” Mr Gupta said.
The latest ABARES Water Market Outlook and accompanying dashboard visualisation can be accessed by clicking here.
As part of the ABARES Perspectives series, these results will be discussed in more detail at a webinar at 1:30pm on Thursday 14 April 2022. To register visit https://agriculture.eventsair.com/wmo-april-2022/rego/Site/Register