By mid-March, two-thirds of California was officially out of drought, thanks to a series of successive atmospheric rivers that have dumped lots of rain on the state. But drought and deluge are inextricably entwined and since the soil is not absorbing the excess water, California is still running out of water.
Water futures market fails to make a splash with California farmers reuters.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from reuters.com Daily Mail and Mail on Sunday newspapers.
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Now farmers, hedge funds and municipalities will be able to bet on potential water scarcity.
With Chicago-based CME Group Inc all set to launch contracts linked to the $1.1 billion California spot water market, consumable water will now be traded on Wall Street. In a first, water is officially joining gold, oil and other commodities that are traded on Wall Street.
Now farmers, hedge funds and municipalities will be able to bet on potential water scarcity starting this week. It remains to be seen if this will enable water users to create a balance between supply and demand. An imbalance is the underlying cause of the scarcity. According to UN, water shortages could affect around five billion people worldwide by 2050.