Water speculator: SA firm Duxton snares 20 per cent of new season NSW Murray trade
Close to 20 per cent of the NSW Murray water trade this season has been conducted by one South Australian company — Duxton Water.
THE Murray Darling Basin’s biggest speculator Duxton Water has dived into this season’s market, trading and transferring 32,830 megalitres on to and off its NSW Murray Water licences in just two months as prices hit $800/ML.
The 32,830 megalitres represents 19.1 per cent of all the 171,836 megalitres traded on and off NSW Murray water access licences in the 2019-20 season, up until last Friday.
Exactly how much can be made out of the water market is reflected in just one of Duxton’s recent trades, in which the South Australian speculator paid $3.15 million for 5000 megalitres of Murrumbidgee allocation at $630 a megalitre, which it then transferred to its NSW Murray licence on August 6.
Trade out of the Murrumbidgee then closed on August 16, leading to a scramble for water on the Murray that pushed the price to $800 a megalitre, lifting the value of Duxton’s 5000-megalitre parcel to $4 million.
The company’s 2018 financial report showed it delivered total returns to its shareholders of 40 per cent last year and has since poured profits into lifting its portfolio of permanent water entitlements, which grew from $173 million last December to $248 million by June 30.
One of Victoria’s largest family-owned vegetable producers, who did not wish to be named, said: “These people are making a quick quid out of farmers’ misery.”
Boundary Bend executive chairman Rob McGavin said the heart of the problem lay in rules allowing pure financial investors to hoard water while pretending to offer financial solutions to irrigators. The olive grower said governments should ban non-irrigators purchasing and carrying over allocation water.
Mr McGavin also called on the Australian Competition and Consumer Commission to urgently investigate water-trading exchanges.
Duxton Water assets manager Alister Walsh said the trade represented both commercial and non-commercial transfers from licence to licence.
“As of the end of July over 54 per cent of the entitlements held by the company are directly allocated through leases to primary producers,” Mr Walsh said. “The balance held entitlements is used to provide water supply through Forward and Spot allocation again through to irrigators.”
Meanwhile water brokers RuralCo and Wilks Water have been trading massive volumes on to their own NSW Murray Water Licences.
RuralCo traded 24,769 megalitres on to its NSW Murray water access licence in the past two months.
Wagga Wagga broker Tom Wilks has also traded 15,868 megalitres of water on to his wife Skye Bellamy’s account, which he said was a contractual arrangement to help clients. NSW Water register records show 10,385 megalitres of this water was traded onto Ms Bellamy’s account in just three days leading up to the Murrumbidgee IVT closure.
Mr Wilks said the transfers allowed buyers “who’s WALs aren’t attached to works”, to transfer water onto Ms Bellamy’s licence, thus avoiding a $4.50 a megalitre variable-use charge.
NSW water deal backfires
A deal brokered by the NSW Government with some of the Murray Darling Basin’s largest irrigation corporations has short-changed the environment of the nation’s most precious resource.
Water trade’s tech battle
Corporate irrigators and their water brokers are using high-speed broadband and sophisticated software to beat the mob on lucrative inter-valley trades.