Reliable price information is a fundamental feature of mature markets. In the case of Australian water markets, price information is not always reliable and this can reduce the trust and confidence of many market participants.

State-based water registers are currently the primary source of publicly available and independent raw water market information for participants. While some registers are better than others, information contained on these registers is frequently out of date, can be misleading based on participant reporting obligations (such as $0 and related party trades) and can be hard to extract efficiently.

New and innovative technologies are emerging that could have the capability to transform water markets, and the speed at which transactions are completed and processed.  Blockchain, the distributed ledger technology, is one example.

Louis Dreyfus, one of the world’s largest agricultural commodities traders, recently completed the sale of a cargo of US soya beans to China using blockchain technology. By utilising this new data validation technology, transaction processing times were greatly reduced, with the administrative component of the trade being reportedly completed in a fifth of the normal time. In addition, the scope for human error was also minimised.

Australian agricultural producers are also attempting to utilise blockchain technology. Products such as Beefledger aim to not only prevent counterfeit and fraud, but also to provide product specific information to end customers, no matter where in the world they are.

If similar benefits could be realised with respect to Australian water markets, for the first time market participants could have a timely and independent source of water price information on which to make important decisions. The practical impacts of new technologies such as blockchain to transform the information available to water market participants is exciting. But in order for this to be implemented, investment and support from government will be required.