Goulburn tradeout restrictions to drive up Murray River water price

Victorian Water Minister Lisa Neville plans to cut net allocation trade out of the Goulburn to Murray River. See the figures.

Trade restriction: Environmentalists have convinced the Victorian Government to cut high summer flows down the Goulburn River (pictured), but it means less water flowing to the Murray during peak demand.

Victorian Water Minister Lisa Neville plans to cut net allocation trade out of the Goulburn to Murray River from 190 gigalitres to just 140GL from July 1, exacerbating summer shortages and pushing up allocation prices from Nyah to the Murray mouth.

Water brokers are already warning the cutback will widen the price gap between the two valleys, capping Goulburn trade and prices, and forcing Murray irrigators to scramble for supply.

One broker branded the cutback a “dairy subsidy” that would keep Goulburn prices low for the industry.

Select Harvest managing director Paul Thompson said the Goulburn inter-valley trade cutback would obviously “shrink the total pool of water available to people on the Murray”, but irrigators knew the decision was coming.

Ecologists and the Victorian Fisheries Authority have pushed the Minister to implement the cutbacks, repeatedly arguing high summer flows down the Goulburn to meet Murray demands were killing fish larvae, damaging vegetation and eroding river banks.

Trade restriction: Environmentalists have convinced the Victorian Government to cut high summer flows down the Goulburn River (pictured), but it means less water flowing to the Murray during peak demand.

The surge in summer demand has been largely driven by a boom in almond, tablegrape and citrus plantings across the sunbaked red sands of South Australia, NSW and Victoria’s Mallee, which have grown by 35,575ha since 2003.

The Murray Darling Basin Authority’s river operators face restrictions on getting water through the narrowing Barmah Choke to meet this surge in demand, forcing the allocation water market to turn to the Goulburn (which is below the choke) for supply.

That demand drove net trade out of the Goulburn to Murray to 250GL in 2017-18, 228GL in 2018-19, 152GL in 2019-20 and 194GL in 2020-21, despite the IVT being set at 200GL until now.

Under the new regime being considered by the Minister, the inter-valley trade limit would allow three openings in Goulburn-to-Murray trade each season.

On July 1 net trade out of the Goulburn would be set at 85GL, which would likely be taken up within a few hours.

In both mid-October and mid-December trade of up to 30GL may open, depending on water usage within the Torrumbarry irrigation district, with a maximum of 55GL net trade out over the two openings. (If Torrumbarry irrigators are using most of their water within the district then more water will be allowed to trade out of the Goulburn).

Trade remains capped from December 15 to June 30.