Water trading strategy 2022-23
Our water trading strategy 2022-23 outlines the types of trading we may undertake across Victoria.
Water allocation trade is one of the tools we use to effectively manage water for the environment. Water trading allows us to move water to the systems where it is most needed, and to smooth out some of the variability in water availability across systems and across years.
This strategy covers commercial water allocation trade (selling and purchasing water allocation), and administrative water transfers ('internal' transfers of Victorian Environmental Water Holder allocation or transfers between water holders).
Download a copy of the Trade Strategy 2022-23.
Water Sale Complete – Northern Victoria
The Victorian Environmental Water Holder has completed the sale of 12,000 megalitres of its 2021-22 water allocation for the environment in the northern Victorian water market.
The water was from the Murray trading zone seven (below the Barmah choke to South Australia) and was made available following the VEWH’s assessment that all priority environmental watering actions in 2021-22 were able to be achieved, and there was sufficient carryover to meet 2022-23 requirements.
The sale was conducted through selected brokers and online exchanges.
The Victorian Environmental Water Holder holds, manages and uses Victoria’s environmental water entitlements to protect the health of the rivers, waterways and landscapes.
As part of managing these entitlements, the VEWH sometimes sells volumes of water allocation and invests the revenue in projects to support outcomes for the environment.
Allocation trade review
In 2019, independent auditors, Marsden Jacobs, undertook an allocation trade review and found the VEWH has not impacted water market prices, transparently signals its trading intentions to market participants, and effectively avoids market distortion and adverse impacts on other parties.
- The VEWH’s allocation trades have not impacted on the market.
- The VEWH’s market performance has been good, both with timing of trade and achieving prices either close to, or slightly above, the prevailing market price.
- The VEWH has a clear and open way of signalling its trade intents and activities and gives enough detail to people taking part in the water market.
- The VEWH’s participation in the market does not have a big influence on market prices. These are largely affected by other market forces like climate conditions, water availability, commodity prices and annual cropping choices.
- The VEWH has effective processes to ease potential adverse impacts on other parties and avoid any distortion in the water market. These include only announcing specific trade intents and activities when they will definitely happen and using existing, well-functioning market methods as a silent participant in the market.
- Water market intermediaries engaged by the VEWH have generally performed well.
Download the full report: Allocation trade review - summary report: Victorian Environmental Water Holder - 1,050kb (PDF)