Financial Times published an article on water futures. The article stated that water futures are about to hit financial markets for the first time, with the launch of contracts tied to prices in California. But academics and investors fear the derivatives will offer a poor hedge for water users and may end up distorting prices for the vital resource. One concern is that speculative trading by hedge funds could drive up the cost of water for the population of California. A 2009 IFPRI Issue brief, When speculation matters found that speculative, short-term trading may have helped drive rising agricultural commodity prices in 2007-08.
Water futures meet cool reception (Financial Times)
October 15, 2020