Water: Trading
Why most water is allocated by law, not sold
What this tab covers How and where it is bought and sold: who buys and sells, exchanges and benchmarks, contract types, the big trading houses and how prices are discovered.Most water is not traded. It is allocated by law, licence or custom and sold by monopoly utilities at regulated tariffs. Markets exist where rights are separated from land. Australia's southern Murray-Darling Basin has the deepest one: entitlements were worth an estimated A$31.9 billion in 2024-25, and seasonal allocations averaged A$153 per megalitre (Ricardo 2025). Chile and the western United States also trade water rights. Since December 2020 CME has listed futures on the Nasdaq Veles California Water Index, priced in dollars per acre-foot. India has no water contract on MCX or NCDEX.
Where it is bought (buyers)
- Central Valley farmers and cities in California buy seasonal water and rights in spot transfers
- Irrigators and the Australian government (environmental buybacks) buy southern Murray-Darling entitlements and allocations
- Gulf and North African utilities buy desalinated water from private plants under long-term water purchase agreements
- Households and industry in India buy water from utilities at regulated tariffs, and from private tankers in shortages
Where it is sold (sellers)
- Irrigation districts and farmers with senior rights in California and the western US
- Murray-Darling irrigators selling allocations or permanent entitlements
- Desalination developers and operators (Acciona, IDE, Suez, Veolia, Wabag) selling water under build-own-operate contracts
- Municipal utilities such as BWSSB and Delhi Jal Board
Exchanges and benchmarks
| Venue | Contract | Notes |
|---|---|---|
| CME Group | Nasdaq Veles California Water Index (NQH2O) futures, US dollars per acre-foot | Launched December 2020; liquidity thin |
| Southern Murray-Darling Basin (Australia) | Water entitlements and seasonal allocations traded through brokers and state registers | Entitlements worth about A$31.9 billion (2024-25, Ricardo) |
| India | No exchange contract on MCX or NCDEX | Prices are tariffs set by state boards and municipalities |
Contract types
- Permanent water entitlements and rights (Australia, Chile, western US)
- Seasonal allocation trades and short-term leases
- Long-term water purchase agreements for desalination and treatment plants (build-own-operate)
- Regulated utility tariffs set by price reviews (Ofwat in England, US state commissions, Indian state boards)
Top trading houses
- Veles Water (index provider and market commentary)
- Water brokers in Australia and California
- Utilities and infrastructure investors holding water assets
How prices are discovered
- Weekly NQH2O index published by Nasdaq
- State water registers and annual Ricardo report for the Murray-Darling
- Regulators' tariff determinations and desalination tender prices