The Victorian irrigation season opens on August 15, although many producers said recent rain meant they would not be watering until early September.
At the beginning of the 2017-18 irrigation season, Aither Melbourne said the southern Murray-Darling Basin water allocation prices ranged from approximately $110 to $160/megalitre (ML).
Wagga Wagga water broker Tom Wilks said the price was surprising, due to the high level of carryover from last season.
“There’s never been more water carried over in Victoria, both high and low reliability, so those early prices are surprising when the supply side looks so good,” Mr Wilks said. Emotion seemed to be driving prices up.
“People are anxious it might not rain and $100 water might turn into $200 water, so they have decided to wade in,” Mr Wilks said. “The market has found a level at the moment but we have got a lot of the year to go, so anything can happen.”
Northern Victoria resource manager Mark Bailey said recent good rains in the north east had seen 9600ML a day flow into Lake Eildon, a figure which hadn’t been seen for some time.
The latest seasonal determinations were 66 per cent of high-reliability water shares (HRWS) for the Murray system, 40pc for the Goulburn and Loddon and 100pc for the Campaspe. The Broken system increased from three to six pc HRWS and the Bullarook system increases from 16pc to 32pc HRWS.
“The soils are wetter and rain is turning into runoff more quickly than in recent weeks,” Mr Bailey said.
“However, the flows into the major storages are still well below average for this time of year.
“Further rain is needed for more runoff, greater volumes in storage, and larger seasonal determination increases.”
Dr Bailey added that Bureau of Meteorology (BoM) seasonal outlooks indicated a drier spell was likely for Victoria.
“Rainfall in the period August to October, which covers the period of highest average flow into the major storages, is likely to be less than average across most of Victoria,” he said.
The latest rain was “putting resources into the right place.”
Mr Bailey agreed the higher prices were probably due to the longer range climate outlook, for dry conditions.
“People are perhaps concerned with the allocations available at the moment,” he said.
“They are looking to shore up a bit of allocation, ahead of the season starting.”
Aither director Chris Olszak said trade restrictions were reflected in prices for parts of the northern irrigation district.
He said prices stood at $125 to $135ML in Victorian Goulburn, $110 to $120 above the Barmah Choke and $140 to $150 below the choke.
“Based on low inflows, seasonal outlooks and agricultural production estimates, Aither expects current allocation prices to hold or potentially further increase leading into the 2017-18 irrigation season,” Mr Olszak said.
“The extent to which the Goulburn dairy industry can trade water allocations to permanent plantings in the Sunraysia Region, which is currently restricted, will be a key driver on Victorian water allocation markets.
“Cotton production would underpin activity on New South Wales water allocation markets.”