Tech-savvy water speculator chokes Barmah trade

A tech-savvy speculator has admitted offering to get irrigators’ water through the Barmah Choke for a fee of $50 a megalitre, on a minimum transfer of 200ML.

Choked trade: A water speculator is using sophisticated software to beat rivals in getting water trade through the Barmah Choke (pictured) Picture: Dannika Bonser

EXCLUSIVE: AT LEAST one tech-savvy speculator is using what appears to be sophisticated software to beat his rivals in the battle to get water through the Murray River’s Barmah Choke during the brief windows it opens, squeezing $200 to $300 of profit out of each megalitre sold.

Water brokers and irrigators are demanding an investigation into the trades, given their window to trade water through the choke have shrunk to what one described as “less than seconds”.

The choke has only been opened for brief periods this season, with irrigators upstream of the choke unable to trade water to downstream horticultural developments, creating price gaps of up to $308 a megalitre.

Anyone who can get water through the choke stands to make huge profits.

In November above choke water was trading for $630/ML compared to $938/ML below the choke, with the difference dropping back to about $200 in December and January.

The Murray Darling Basin Authority only allows downstream trade when an equal amount of water moves in the opposite direction, which it announces by amending the trade-out number on its website.

It appears at least one water trader is using web-page data scraping software to almost instantaneously drag the Barmah Choke trade number off the MDBA website as soon it appears, which is then fed into computer code that automatically lodges a transfer application.

Once the total trade-out volume is taken up, which may vary from 50ML to 2000ML, no further trades are accepted via the electronic trading portal, which sorts applications on a first-come, first-served basis.

The Barmah choke window has opened about 20 times each month during December, January and February, but even those running Victoria’s water register have noticed it has repeatedly closed within seconds, with just two to three traders gaining all transfers.

Brokers have told The Weekly Times the tech-savvy water trader is well known, given he had not only dominated Barmah choke trade over recent months, but approached them offering to get their clients water through the choke for $50 a megalitre.

“He’s been offering a service to brokers,” one firm’s manager said. “If people want to get water through the choke he said it’ll cost $50 a meg, but it’s a minimum of 200 (megalitres).”

When the ater trader was contacted by The Weekly Times he admitted offering brokers the service, but refused to reveal if he was using web page scraping software.

The trader has been using a number of brokers to sell the water he gets through the choke.

One large brokerage estimates that just on their books alone the trader had made enough to buy a house.

The Weekly Times is not suggesting the speculator has acted illegally.

Kilter Rural water general manager Matthew Bryant said “we support fair access for all and don’t think anyone should have an advantage, especially over this season, when price differences between valleys or trading zones are great”.

Victorian Farmers Federation water council chairman Richard Anderson said irrigators didn’t have the chance to get water through the choke, when trying to compete with this type of speculator.

“It needs sorting out, using a ballot or some other measure, because before a farmer like Richard Anderson can even get his bank card out, it’s (choke trade) closed again.”