A Few Thoughts On Investing In Water [Virtual Water]

investinginwater
michaelburry
valueinvesting
investing

#1

I have already written about investing in water by buying land. Here are some scattered, un-related points on investing in water.

If you are making a virtual water play on certain countries, you need to chose your country carefully. The middle east are rapidly running our of water, yet farmland in these parts has a semi-religious function. This means its very unlikely the people will support the government buying/confiscating their land to support virtual water trade…

Another thing to consider is the value of foreign reserves. Supporting virtual water trade means paying for increasingly expensive water-intensive commodities. African countries with low reserves, will never fund this sort of thing…

You need to make sure that the price of virtual water trade still dwarfs the price of solar de-salinisation…

You need to choose a country which has an extremely low proportion of farmers relative to other workers. Again african countries would be a poor fit…

Virtual water trade does not benefit farmers in water-starved societies. Their land is bought back by government, or seized, to address water crisis.

According to my brief studies, India is the ideal target.

• It’s rural population is low relative to the rest of the world.

• It has large foreign reserves.

• It is already under extreme water stresss

I can foresee a scenario where the government is forced to seize land producing water-intensive crops and use the crops to cover their blue water expenses. Many of the water deprived areas are extremely inland meaning that it would be incredibly difficult and expensive to physically transport water to them.

There are my thoughts. They aren’t ordered or anything, sorry for that!


Investing In Water Part 2 - [Virtual Water]