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Water trading is a method to exchange water between users, within a defined management area, without changing the total volume of water taken.
Trading is a mechanism for potential users who may not hold a licence to obtain water; and for users that do have a licence to acquire additional water.
All water trading in the Northern Territory (NT) is coordinated by the Water Resources Division and all trades must be approved by the Controller of Water Resources.
Water trading can only happen within declared Water Allocation Plan (WAP) areas and needs to comply with the rules set out in the relevant WAP regarding trading.
The Water Allocation Plan, Groundwater Licence Register includes licensee information such as contact details along with amounts of each licence issued and if that licence is permitted to trade water.
Go to the Northern Territory Government website to view the approved water licence register.
Water trading prices
The Department of Environment and Natural Resources (DENR) will not give any advice on the price at which traders should offer to sell or buy water, but there are a number of subjects that traders could consider when determining offer prices including:
- annual variation of announced allocations (if such announcements are made)
- gross margins or likely returns that potential traders could receive from using the water
- prices paid for water in the trader's WAP area and trading zone
- prices paid for water in other WAP areas and trading zones
- price trends for previous seasons, particularly in regard to price volatility at the start of the water accounting year and towards the end of the dry season
- volumes available for sale or to buy in the WAP area and/or trading zone
- whether advice from another party may be of assistance.
The National Water Commission produces an Annual Report on water markets in Australia and there is a dedicated National Water Market website.
Go to the Australian Government Bureau of Meteorology website to view the National Water Market.
There is currently no government charge for trading water. It is up to the buyer and seller to determine the terms and conditions of cost per unit of water.
Water trading procedure
First the purchaser seeks out a suitable seller.
This can be done by contacting licensees via the contact details provided on the licence register, or placing a tender document or similar in the local paper.
An agreement is made between the two parties and generally includes:
- purchase price - overall amount or price per megalitre ($/ML)
- duration of the trade - although a temporary trade may only be on an annual basis, an agreement may be made for a longer period, but would remain subject to the relevant WAP rules
- trading application forms are completed by both the seller and purchaser and can be submitted to DENR via email, post, fax or in person - assessment Criteria includes:
- any infrastructure used to extract traded water must be compliant before a trade will be allowed by DENR
- the appropriate trading zones are taken into account
- water is traded for a price determined by the market, as such, trades do not need a property development plan to be submitted.
Last updated: 28 September 2016