Water Trading Definitions
Temporary (Allocation) Trade
A temporary trade is the transfer of allocation specifically for the current irrigation season, whereby the allocation is transferred from one eligible licence/account holder to another.
Permanent (Entitlement) Trade
Similar to the sale of land, a transfer of permanent water is the transfer of the water entitlement to the purchaser on a permanent basis via exchanged contracts and financial settlement. The purchaser will retain the parcel and receive any allocation granted upon it from the date of the transfer indefinitely or until the time at which they sell the entitlement.
Deferred (Allocation) Temporary Trade
A Deferred Temporary Trade is the transfer of allocation in the current season. The parties agree on the volume, price and delivery date of the allocation, a deposit is paid upon signed agreements and full payment is due prior to the agreed delivery date. A transfer of this nature allows for water users to plan their water needs based on their own income payments.
Forward (Allocation) Water Trade
The Forward Water Market is a mechanism which enables clients to plan for future irrigation requirements thus removing uncertainty around their requirements. The Forward Water Market is an extension of the current spot market, enabling the contracting of temporary water parcels at a set price to be delivered at a future date, to be determined by the seller and purchaser.
Multi-Year Forward (Allocation) Water Trade
The Multi-Year Forward Water Market is a mechanism which enables clients to plan for future irrigation requirements across multiple water season, thus removing uncertainty around their requirements. The Forward Water Market is an extension of the current spot market, enabling the contracting of temporary or permanent water parcels at a set price to be delivered at future dates, to be determined by the seller and purchaser.
Carryover / Parking (Allocation)
Carryover allows General Security Entitlement Holders to take their unused water allocation into the following season. Entitlement Holders can also sell the Carryover Space on their licence to another party who has unused entitlement of their own. In this instance the other party pays for the space, the allocation is transferred to the Entitlement Holders licence prior to the end of the season (30 June) and returned after the commencement of the new season. Each state and water source has its own Carryover rules which must be followed to avoid forfeiture of allocation.
Lease (Entitlement/Allocation)
Leasing Water Entitlement is a formal agreement between the entitlement Lessor (Owner) and the Lessee (Purchaser) for a set period of time, generally between 3-5 years. It allows the Lessee to secure their future needs at a mutually agreed price all the while having access to the allocation granted in accordance with the seasonal determinations.