Is water a commodity

Answer 1

In addition taking into consideration the definition of commodities in financial investment like Forex, water is not a commodity. Commodities are unique, valued and monetized. What makes commodities valuable to the exchange market is the availability of it in a larger quantity with rich features in a region and lesser or no availability of it in another region. For example Gold is found vastly in South Africa compared to other regions in the world. This makes it a valuable commodity in the exchange market for buying, selling and keeping as monetary reserve. However water cannot be viewed in this manner because it is predominantly found everywhere not like Crude oil.

Answer 2

Since many of us "buy water" whether it be in a bottle or monthly water bill, and pay prices based upon supply and demand it would not be technically incorrect to refer to water as a commodity, however . . .

As of 2011, water is not yet a formal commodity traded on an organized exchange, but it likely will be sometime in the next two decades.

Water has become big business, especially in developing countries where the World Bank has gone to significant lengths to privatize water services. Commodity futures market generally develop based upon a need for price stability.

Assuming we stay on the current path where water supplies are increasing in demand, the need for water by business in the coming two decades may lead to the formal commoditization of water on an organized exchange in order for business that rely upon water to achieve price stability.

Answer 3

Well.. yeah. There isn't an infinite amount of water.