While large swaths of Britain were struggling under several feet of water this summer, the wider world was on the verge of droughts. That is why water is even more valuable than oil and could end up being traded in a financial marketplace.An extremely small percentage of water in the world is drinkable fresh water — the rest is saline, frozen or locked underground.

Water crises have long been associated with the poorest communities. But wealthy nations are now becoming affected. In Australia, where drought has dragged back the economy this year, limited trading in water entitlements has been happening for some time and there are efforts to create a national water market and a water futures exchange.

Water trading in the Murray region is popular with farmers, with up to a third of all irrigated supplies traded each year.

Recently prices hit record highs, fetching up to $1,000 (£438) a megalitre (one million litres) in the Murray-Darling Basin. Noting the significance of water to Australia’s rural economy, the Sydney Futures Exchange, now part of the Australian Securities Exchange, has proposed a water market.

The reality of trading water futures is not as far-fetched as it seems. Futures are used by businesses as a hedge against unfavourable price changes and by speculators who hope to profit from such changes.

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