Frequently Asked Questions
Most frequent questions and answers
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 will be traded on organized and regulated financial markets with oversight provided by the appropriate supervisory body.
What factors drive changes in the Aqua Index price?
The availability of water for agriculture and 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.