Water Market Update: May 2026

Market snapshot

The WY2025/26 irrigation season is effectively over. Allocation prices have eased from their January-February peak ($300-320/ML in Zone 1A) as demand winds down, but remain well above the long-run average. Year-to-date VWAP sits at $258/ML for Zone 1A — the highest season average since WY2019/20.

| Zone | Season VWAP ($/ML) | 9-month volume (GL) | |------|-------------------|---------------------| | Zone 1A (Greater Goulburn) | $258 | 234 | | Zone 6 (Murray above Barmah) | $267 | 109 | | Zone 7 (Murray below Barmah) | [stat: price] | [stat: volume] | | NSW Murray | [stat: price] | [stat: volume] | | SA Murray | [stat: price] | [stat: volume] |

To understand what drives prices, see our water pricing guide.

Allocation announcements — season wrap

Victoria

Final NVRM determinations for WY2025/26:

• Goulburn HRWS: 80% (final, 16 March 2026). Opened at 31% on 1 July.
• Murray HRWS: 100% (reached 17 November 2025). Opened at 39%.
• Goulburn LRWS: 0% all season — no low-reliability water issued.
• Murray LRWS: [stat: final Murray LRWS]

The Goulburn system stalled at 80% — Eildon inflows were below expectation throughout the season. No LROS (Low Risk of Spill) declaration was issued, meaning carryover holders in spillable accounts carried risk all year. In practice, with Eildon at 42%, spill risk was negligible.

New South Wales

NSW Murray High Security reached near-full allocation. General Security balance stood at approximately 51% of entitlement (853 GL) by November 2025. NSW allocations are more volatile than Victoria's — General Security can open at 0-10% in dry years.

South Australia

SA received its full allocation under the Murray-Darling Basin Agreement. SA Murray allocation prices traded at a downstream premium — $186/ML in WY2024/25 versus Zone 1A at $124/ML.

Storage levels — the critical numbers

| Storage | Current % | Volume (ML) | vs Last Year | Trend | |---------|-----------|-------------|-------------|-------| | Lake Eildon | 42.4% | 1,414,519 | -22.8pp | Falling (-18,000 ML/wk) | | Waranga Basin | 48.6% | 210,115 | +8.4pp | Falling | | Dartmouth Dam | 64.7% | 2,493,679 | -16.3pp | Stable | | Hume Dam | 27.1% | 815,232 | +1.5pp | Falling (-9,900 ML/wk) | | Lake Eppalock (Zone 2) | 35.6% | 108,479 | -27.6pp | Falling |

The headline: Eildon is 22.8 percentage points below this time last year. At current draw-down rates, Eildon enters WY2026/27 (1 July) at approximately 35-40%. This matches the storage profile of WY2018/19 and WY2019/20 — both of which produced $366-485/ML seasons.

Hume at 27% is critically low, though Dartmouth (64.7%) provides backstop capacity. The Murray system will draw on Dartmouth to maintain Zone 6 allocations — this buffer keeps Murray HRWS above Goulburn HRWS in early season.

IVT status

The Goulburn-to-Murray IVT corridor is now in the post-15 December period — only back-trades create new opportunity. The effective season for forward IVT is closed.

For WY2026/27 planning: the first IVT tranche reopens on 1 July. Given the tight storage outlook, expect strong demand for Goulburn-to-Murray transfers early in the season. If the opening allocation is low and Murray irrigators scramble for Goulburn supply, IVT could come under pressure earlier than usual.

Weather and seasonal outlook

BOM's latest indicators:

• ENSO: Neutral-to-developing El Nino (as of April 2026)
• IOD: Positive (+0.74, Jan-Mar 2026 average) — active drying signal
• Rainfall outlook (May-July): Below-average likely for southern MDB catchments
• Temperature outlook: Above average

This combination — positive IOD, developing El Nino, below-average rainfall outlook — is the bullish setup for water prices. If El Nino fully confirms by August-September 2026, winter/spring inflows will be below average and Eildon will struggle to recover. The last time these conditions aligned was WY2018/19.

What this means for WY2026/27

Price outlook

| Scenario | Conditions | Zone 1A VWAP projection | |----------|-----------|------------------------| | Bull case | El Nino confirms + positive IOD | $350-450/ML | | Central case | Neutral-dry, Eildon July = 38-42% | $250-350/ML | | Bear case | Surprise La Nina, good winter rain | $100-150/ML |

Base case: Eildon enters at ~38-40%, opening HRWS at 35-45%, prices starting at $180-220/ML and peaking at $300-380/ML in January-February 2027.

If you need to buy next season

Start planning now. The early-season window (July-September) typically offers lower prices than mid-season. In a year where opening allocations will be low, locking in 50-60% of your requirement early gives you cost certainty before the market runs.

If you hold entitlements with carryover capacity, carrying any surplus from WY2025/26 gives you a head start on 1 July without touching the temporary market.

If you have surplus to sell

Late-season selling into May-June faces the June 30 cliff — holders dumping water before expiry. If you have surplus, consider:

• Selling now at current levels rather than waiting for a thinning market
• Carrying over if you have headroom (spill risk is negligible at current storage levels)
• Carrying over is essentially a bet that WY2026/27 prices will exceed current levels — given the outlook, that bet looks favourable

Carryover deadline reminder

Victorian LROS declaration deadline: approximately 1 June. If you intend to carry water into WY2026/27, complete the declaration before this date. Missing it means your unused allocation expires on 30 June.

Given Eildon at 42% and the dry outlook, carrying into WY2026/27 is strongly favoured. Spill risk is negligible.

Entitlement market

Permanent HRWS entitlement activity has [stat: increased/remained moderate] this month. With the dry outlook strengthening, entitlement values are likely to firm. Historical pattern: entitlement prices lag allocation price rises by 3-6 months. The time to buy entitlements cheaply was WY2022/23 at $2,000-2,500/ML. Current levels are likely $3,000-4,000/ML and rising.

Frequently asked questions

Where does the price data come from?

VWR (Victorian Water Register) published trade data for Zone 1A and Zone 6. Ricardo Water Markets Reports for multi-zone coverage (Zone 7, NSW, SA). Our own brokerage activity supplements this with real-time visibility.

How often are allocation announcements made?

NVRM announces fortnightly during the irrigation season (approximately July-March). The first seasonal determination is published on 1 July.

What does IVT closure mean for me?

If Goulburn-to-Murray IVT is exhausted, Zone 1A water cannot transfer to the Murray system. Murray buyers lose access to Goulburn supply. Zone 1A prices may soften while Murray prices firm. Plan cross-zone purchases before IVT runs out.

How do storage levels affect prices?

Eildon's percentage full on 1 July is the best single predictor of the season's allocation price. Below 40% = expect $350+/ML. Above 80% = expect $50-120/ML. Monitor weekly at the GMW or BOM water storage dashboards.

Can I subscribe to these updates?

Yes. Contact us to join our monthly market update mailing list during the irrigation season.

Looking ahead

Key dates for WY2026/27:

• May-June 2026: Watch winter rain. Does Eildon recover?
• 1 July 2026: Season opens. First NVRM determination. Opening HRWS below 40% is bullish.
• August-October: BOM September outlook. Below-average for spring = buy signal.
• 15 October: Second Goulburn-to-Murray IVT tranche opens.
• November-January: Peak demand. Price apex.

We publish the next update in early June, covering final WY2025/26 carryover decisions and the setup into the new season.

Disclaimer: This market update is general information only. It does not constitute financial, investment, or water trading advice. Water prices are subject to seasonal conditions, government policy, and factors beyond anyone's control. Past prices are not a reliable indicator of future prices. Seek independent professional advice before making trading decisions.

Talk to a broker about your water strategy. Explore current trade opportunities.