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Aruba, July 30, 2014 - WATER may be traded on financial markets in the coming years, experts have said.
With supplies increasingly becoming an issue in the global economy, financial experts have said an increasing amount of water used will need to come from seawater desalination, thereby increasing costs.
And there is feeling water is likely to be viewed increasingly as a commodity which could be traded on a global-scale market.
A 2011 World Economic Forum dicussion paper entitled ‘The Need for Fresh Water Economics’ raised the issue initially, and stated growing world populations would compound water scarcity, especially in agriculture.
The fresh suggestions about future water supply have raised concerns trading water on financial markets could lead to grey areas in the sector.
NFU chief arable adviser Guy Gagen said: “Water in fields goes into the ground and onto our crops. When we export those crops we are effectively exporting water, which is a precious resource.”
Mr Gagen also expressed concerns about European Union regulations in financial markets, and suggested it could be a similar situation if water was traded in such a way.
He was referencing the Markets in Financial Instrument directive, an EU move to curb the power of financial speculators in futures and commodity markets.