Associate Professor Adam Loch said there were a lot of “market myths” the researchers found no evidence of.
“We found no evidence of hoarding behaviour in the market volume trends assessed and, therefore, dismissed hoarding as a driver of recent higher prices,” Dr Loch said.
The published research — titled Markets, mis-direction and motives: A factual analysis of hoarding and speculation in southern Murray–Darling Basin water markets — used speculation theory on Murray-Darling Basin water trade data between 2008 to 2020.
The report said it was "more plausible that agricultural sectors — notably horticultural users — have driven price increases given their requirements to access water at any cost during periods of low supply".
Speak Up chair Lachlan Marshall said he was “stunned” by the report and disagreed with the findings.
“Water can’t be used for growing if it’s owned by an investor or superannuation fund waiting for the next dry spell in hope of maximising their return,” Mr Marshall said.
“At present, with the impacts of water reform and climate change, that is becoming problematic.”
Dr Loch said there was evidence to suggest some users may control around two per cent of trade volumes when water is available to them, but this did not provide a basis for market influence.
“There is a high likelihood of speculative behaviour in Murray-Darling Basin water markets because of the opportunity to make high profits in certain years,” Mr Loch said.
“But the claim that speculation is solely undertaken by external agents such as superannuation funds does not hold water.
“It is just as likely for an irrigator with lower total trade costs to be speculating and achieving significant gains in the market.”
Dr Loch is a former cotton grower and spent 10 years advocating for irrigators in Queensland before making the switch into research on water markets and irrigator decision-making.
In the coming months the ACCC is expected to release its final report from the Murray-Darling Basin water markets inquiry, with a key focus on speculating and the hoarding of water in the 2018-20 period.
The competition watchdog’s interim report into the Murray-Darling Basin water market highlighted a variety of concerns about the water market, including transparency, the conflict of interest for unregulated brokers, the manipulation of water prices, corporate entities gaining unfair advantage over family farms and the different regimes in the basin states.
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