The CME Group is set to launch
The contracts will allow investors and farmers alike to bet on the future price of water. The contracts are tied to the $1.1 billion California spot water market.
While water will officially join the likes of gold, oil, and otherOne high-profile investor potentially looking to capitalize on the newly launched water future contracts is Michael Burry of "The Big Short."
Burry highlighted water as one of his top investment ideas following the great financial crisis of 2008, as he sees demand for the life-sustaining natural resource to continue climbing as supply falls due to population growth and climate change. But farmers will likely utilize the water contracts more than investors, as they look to hedge out their input costs amid an increasingly uncertain climate environment.The CME Group initially announced the launch of water futures back in September.
"With nearly two-thirds of the world's population expected to face water shortages by 2025, water scarcity presents a growing risk for businesses and communities around the world, and particularly for the $1.1 billion California water market," said Tim McCourt, CME Group Global Head of Equity Index and Alternative Investment Products.
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