Water allocations in the southern Murray Darling-Basin finished 2022/23 at the highest level in 16 years, with most major entitlements at or near full allocation. In the June quarter, allocations traded below $0 per megalitre, but have since bounced back ahead of the season opening. According to consultants Aither Water Markets, while irrigators are likely to enjoy another year of relatively low water prices, they could climb back to $200/ML by the end of the financial year.

According to Aither’s principal Ben Williams the potential of Commonwealth buybacks could also influence the current price. He said markets were influenced by challenging economic conditions, such as low commodity prices and high interest rates but the main driver of prices is the prospect of El Niño conditions. Williams said allocation prices are likely to remain below the long-term average for this year, but said the weather outlook for 2024/25 would have a strong influence on how the markets close out the year.