Water is all set to join the expensive commodities on earth like gold and oil on Wallstreet futures commodity. In an unexpected turn of events, water now sits next to the rare-valued items.
Wallstreet futures commodity is a separate section where people in the relevant fields can bet on the price and worth of an item in the future. Earlier, rarities such as gold, copper, and diamonds acquired several spots. However, with water running scarce in many parts of the world, the Wallstreet Journal has added this to their futures commodity.
This addition will allow the farmers, investors, and municipalities to bet on the worth of water in future. As water becomes a rare commodity for many, investors took this opportunity to bet on it by adding it to futures rare materials. CME Group launched the contract, which is tied to $1.1 B of California spot water market, according to Bloomsburg.
The contracts were laid out in September, whereas the trading began on December 7. During the month of September, when the contract was initially laid out, California was experiencing high temperatures, long drought and scarcity of water. The deficiency of water in a developed country only hinted at more dangers to come across the world.
Netizens are raging over Wallstreet journals’ addition of water into their betting services, as it may have a significant impact on prices of water in future. For example, in dry areas where water may be expensive during summers, people can offset the cost on futures commodity to reset the rates of water. However, this can work the other way around as well in order to reduce rates of water.
Patrick Wolf, the lead product developer with Nasdaq Global indexes, told CNN that this could be used for a good cause as well, as the contract will bring transparency to market pricing whenever water became scarce.
“California has long periods of dry conditions followed by short periods of very wet conditions. And that affects the price a lot,” Patrick Wolf said.
A report revealed by food and agriculture organization confirmed that around 1.2 B people in the world are experiencing a high level of water shortage. Another report confirmed the scarcity by revealing that the availability of freshwater resources per person has decreased by more than 20% in the past twenty years.
“Climate change, droughts, population growth, and pollution are likely to make water scarcity issues and pricing a hot topic for years to come,” RBC Capital Markets managing director and analyst Deane Dray told Bloomsberg.
Despite the rage and anger, it is a moment of truth of human beings. Water is becoming increasingly scarce in different parts of the world due to repetitive droughts, dry weather due to global warming, and heat. As the earth is ageing, the impact of human activities is speeding up the process of natural damage to the Earth, resulting in droughts and bad weather conditions.