HUNDREDS of NSW irrigators are about to be left high and dry by the NSW Government's 60,000-megalitre cap on water entitlements sold to the Commonwealth this season.
Water brokers told The Weekly Times the Commonwealth was one of the few buyers in a depressed market.
They said the market was being flooded by desperate sellers trying to offload NSW general security entitlement.
One Elders broker said the 60,000-megalitre limit was forcing down prices as desperate irrigators tried to sell, fearful they would miss out on the Commonwealth tender.
"There's a feeding frenzy out there. There's certainly a huge volume being offered," the broker said.
"This slump in price will have considerable impact on people's equity, which will put pressure on the banks."
The Commonwealth closed the first of its three $90 million tenders to buy irrigators' water in the southern Murray Darling Basin on January 29, with two more three-week tenders to start in early March and late April.
Two brokers said they told their NSW Murray irrigator clients to put their general security entitlement into the tender at $800-$900 a megalitre, well below the $1320 a megalitre average price the Commonwealth paid in 2008-09.
"I wouldn't be surprised to find the Federal Government's whole strategy of three quick tenders was all designed to ratchet down the price," one of the brokers said.
Another NSW broker said there were rumours that Murray Irrigation and Murrumbidgee irrigators had put anywhere from 80,000 to 150,000 megalitres up for sale to the Commonwealth
He said the huge volume on offer was being driven by a series of drought-driven low or zero allocations made against NSW general security entitlements.
But Murray Irrigation chief executive Anthony Couroupis was more upbeat about the NSW general security market saying that while there was a cap on sale to the Commonwealth there were "other opportunities" for irrigators to sell to each other.
Victorian Farmers Federation water council chairman Richard Anderson said his members were sick of hearing NSW criticise Victoria's 4 per cent cap on annual entitlement trade, when the NSW Government was doing the same thing.
"NSW has their own cap, which at 60,000 megalitres is a lot less than our 4 per cent cap on gravity irrigation districts," Mr Anderson said.
