Water is vital to every living thing on earth. Water should be available to everyone and everything that needs it, but sadly this is not always the case. This is where water trading can help benefit these communities.

What is Water Trading?

Water trading is about the buying and selling of access rights to water. Some countries such as Australia, United States, and South Africa have water trading schemes. It is where water companies are responsible for supplying the water in an area, but get the water from someone else, either from another supplier or a third company. 

The trade can be with raw or treated water, it is usually agreed as part of a Water Resources Management Plan (WRMP) which is part of a scheme to ensure long term water supply in an area.  

In the UK most of the water trades within companies were agreed prior to privatisation in 1989. It is argued by some experts that water trading can promote more efficient water distribution, because a market-based price encourages users to allocate resources from high to low level value activities. Because of water trading it means that areas where water is scarce can rely on a supply. 

In the UK because of changes within the water market that took place in April 2017, businesses can opt which company they want to supply their retail-water services. This means that businesses, charities, and public sector customers no longer required to buy retail services from their regional company, they are now able to choose their water retailer, so could choose one company for wastewater and another for their water supply.

Virtual water

There are countries that will import and export virtual water globally through their international trade relations, the UK is one of the main virtual water importers in the world. 

Water Footprint says, “For water-scarce countries it can sometimes be attractive to import virtual water (through import of water-intensive products), thus relieving the pressure on the domestic water resources. This happens, for example, in Mediterranean countries, the Middle East and Mexico. Northern European countries import a lot of water in virtual form (more than they export), but this is not driven by water scarcity.”

Bottled Water

Some companies like Nestle trade in bottled water. The bottled water trade has been dubbed the ‘marketing trick of the century’, with the consumption of bottled water at its highest ever, probably down to consumers being more health conscious and wanting to stay away from added sugar and additives in soft drinks. 

The trade association of companies in the bottles water industry is The International Bottles Water Association (IBWA). The association ensures that during events such as National Hurricane Preparedness Week that bottled water is not taxed or banned, it is also involved in other legislation and regulatory areas.

The first bottled water was Perrier which was first introduced in the 1970’s, and no one could have foreseen the popularity that bottled water would have gained with consumers in the decades that followed.