GREENEYE provides a complete operating system for the water market. Just as a computer Operating System interconnects processing power, printers, display screens and communications facilities, so the GREENEYE operating system connects State Water Registry Offices, a Master Market Maker, Water Brokers, Mainstream Financial Brokers and a variety of Internet Portals with supporting Research Analysts, all instantaneously to irrigators, investors and the trading public. Trades can be executed instantly, settled daily, prices are transparent and risk managed in real time.
Brokers will be offered their own branded webpage versions of the trading front end for themselves and their clients, to include subscription to charting and professional visual trading capability. Straight through processing will eliminate delays, tedium and paperwork. Member banks, brokers and stock and station agents will be offered trading account relationships with a household name custodian who will also act effectively as a prime broker. The market making partner would also be well placed to win Government mandates to acquire water for environmental flows, and in so doing further help provide liquidity, stability and improved transparency to the market for entitlement and allocation.
GREENEYE is developing innovative, cash based, contracts. Innovative contracts will concentrate trading and liquidity from the scores of contract variations that currently exist.
MARKET AND SIZE:
Excluding hydroelectric use, Australia yearly consumes about 18,000 Gigalitres (GL) of water, of which 12,000 GL comes from the Murray-Darling Basin (MDB).Water trade by water entitlement owners and irrigators currently totals over $600M per year in about 15,000 transactions, equating to 1000 GL at the price of $600/ML prevailing in December 2007. In 2007, temporary water entitlements traded at a price as high as $1200/ML, compared with a price of about $600/ML to desalinate water, and with about $1000/ML for urban water delivery to households in Melbourne. The Rudd government has announced it will increase the environmental flow acquisition from 500 to 1500 GL, alone representing more than the current total volume of trade. Economic analysis indicates that once commodity markets develop trading depth and liquidity their annual supply is traded many times. For example the annual volume of US grain crops is typically traded every three days by the Chicago futures markets! A 21st century market place would serve to multiply Australian water trading volumes, greatly reducing trading costs, creating new investment opportunities, improve irrigator water hedging options and help to allocate Australia.s main flow of water, the MDB, more efficiently.
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