You could be forgiven if, amid the recent chaos of COVID-19 and U.S. politics, you missed some news related to what is arguably Canada’s most valuable mineral resource.Just before Christmas, the CME Group, the New York-based market operator that takes its name from the Chicago Mercantile Exchange — once described as the biggest financial exchange you’ve never heard of — began trading water futures.For the first time, Wall Street traders are now able to take a stake in the future value of water, the way they have with other agricultural and mineral commodities.As with gold or pork bellies or natural gas, commodities speculators may see it as a kind of sophisticated gambling on derivatives, but the intent of the new water futures market is to share the risk of unexpected price swings for farmers and other water users.While traded in North America’s financial capital, so far the water contracts being bought and sold are limited to five water districts in drought-prone California, representing a tiny fraction of the water actually used in the state, never mind the whole country.But as the commodities market launched, the implication by many of those involved, including CME Group executive Tim McCourt, was that pricing water risk could be a business that expands well beyond California.
Source: Can Wall Street help us find the true price of water? | CBC News
