Aqua Index: 1217           12/22/2016 22:30



Why does the price of water range from only $0.12 to over $1,000 or even $5,000 per metric ton of water?

The price of water is affected by local factors, short term events, regional policies and national and governmental use of exit fees and taxing, which deny the possibility of establishing an integrated price of water.

Aqua Index provides a mathematical calculation for determining the price of water based on the exchange traded cost of agricultural commodities as well as the amounts of water known to be required in the production of various commodities, among other factors.

Why is the Aqua Index price for water more reliable than other methods?

The patented Aqua Index price is calculated according to the cost of freely traded agricultural commodities, such as wheat, corn, sugar, etc. It takes into consideration both the irrigation water needed for producing the commodity and the water component within the commodity. This gives an impartial index price for water.

On what basis will financial instruments on water be traded?

All Aqua Index financial instruments, such as certificates, bonds and futures, will be backed by a margin method (SPAN) and use real, available, water sources as collateral.

What factors drive changes in the Aqua Index price?

Changes in agricultural commodity prices have an effect on the Aqua Index price. However, the derived price of water is less volatile than that of individual agricultural commodities.

Why is the Aqua Index price more stable than individual agricultural commodities?

The Aqua Index price is based on a range of agricultural commodities. Fluctuations in  the prices of a single agricultural commodity has limited effect on the Aqua Index price, as it may be balanced by more stable prices in other commodities. Therefore, Aqua Index financial instruments, used as a basis for investing in the broader commodities market, is more stable than investing directly in specific agricultural commodities.

To Top