Water Futures Trend: Scarcity Risk Or Opportunity?
As of March 2021, some interesting things are happening in the water futures markets, which relates to some of the work I envision in the Pacific.
If you go to Google Trends, it shows a “water futures” interest spike from early 2020.
With Covid-19 and the global pandemic of 2020, we saw some noticeable interest in water futures.
For the uninitiated, futures trading gives speculators an opportunity to put their guesses on the future price of a financial instrument or commodity, like oil or gold. But now "water" is setting its mark as a tradable commodity.
But should water be traded as a commodity?
Our planet is made up of 70% water but, ironically, freshwater sources are drying up. As such, demand is escalating day by day. We will likely need more freshwater in the coming years.
But the question is, should we be speculating on water? And what does that mean for us as a global society?
In an article titled should water be traded as a commodity, these same questions were explored.
Water is one of the most important resources for humanity. It was recognized as a basic human right by the United Nations General Assembly on 28 July 2010. But the situation is worse than expected. People are now fighting over water.
As a result, water has become the latest battleground in the defence of what some say should be a fundamental human right.
Now, couple this with what's happening with "seafood fraud" globally. There's even a documentary on Netflix about this called Seaspiracy (worth checking out).
These countries will pop up on the top of the list (in terms of search interest) when you search for “water futures” on Google Trends:
4. South Africa
In Dec 2020, California Water Futures began trading due to fear of scarcity. But in the case of the Pacific, could this be a way for the region to turn its greatest threat (the ocean) into an asset (that gets exported to other nations if it figures out affordable desalination)?
If we sum up the above-mentioned issues (scarcity of water, seafood fraud, and a resetting of the world's financial system) we have a new batch of interesting problems and opportunities.
In my opinion, companies like UNISOT are examples of staying ahead of the curve, by positioning themselves in the seafood, supply-chain, and blockchain arenas.
But what's really going to be interesting is if freshwater sources become scarce in developing countries, will they need to ship it in? And if they need to ship it in, where will it come from?