Virtual Water Trade

Virtual water trade refers to the idea that when goods and services are exchanged, so is virtual water. When a country imports one tonne of wheat instead of producing it domestically, it is saving about 1,300 cubic meters of real indigenous water. If this country is water-scarce, the water that is 'saved' can be used towards other ends. If the exporting country is
water-scarce, however, it has exported 1,300 cubic meters of virtual water since the real water used to grow the wheat will no longer be available for other purposes.

Daniel Zimmer, Director of the World Water Council, in his presentation at the session on "virtual water trade and geopolitics" at the 2003 World Water Forum in Kyoto:

"The contrast in water use can be noticed between continents. In Asia, people consume an average of 1,400 litres of virtual water a day, while in Europe and North America, people consume about 4,000 litres. About 70 per cent of all water used by humans goes into food production. [...]

"Among the biggest net exporter countries of virtual water are the U.S., Canada, Thailand, Argentina, India, Vietnam, France and Brazil. Some of the largest net import countries are Sri Lanka, Japan, the Netherlands, South Korea, China, Spain, Egypt, Germany and Italy."

Water-scarce countries like Israel discourage the export of oranges (relatively heavy water guzzlers) precisely to prevent large quantities of water being exported to different parts of the world.

Food prices are soaring around the world, triggering hunger, hoarding and a crisis in the world food trade. There have been pasta panics in Italy, tortilla wars in Mexico, bread riots from Haiti to Cairo and rice shortages from Bangladesh to the Philippines. Some blame this on biofuels. But the real culprit is water.

Once, countries largely grew their own food, but an increasing number no longer do. And for many, particularly in the arid Middle East, the prime reason is a shortage of water. They can only feed themselves through imports of thirsty food crops. Economists call the water it takes to grow these crops "virtual water."

As water shortages emerge around the world--due to climate change and the sheer demand for the stuff--the exporting countries are going to become increasingly unable, or unwilling, to export their virtual water.

That will threaten the world food trade; some say it already has.

We don't realize it as we sit down to a meal, but most crops require huge volumes of water to grow: 65 gallons to grow a pound of potatoes; 650 gallons for a pound of rice.

Often, food supplies are only maintained at the expense of literally emptying some of the world's great rivers, such as the Indus in Pakistan, the Yellow River in China and the Nile in Egypt. Elsewhere, underground reserves are being pumped dry.

But increasingly, countries are giving up on trying to feed their populations from their own resources and are switching to food imports. That means they are also importing the water embodied in the crops, or virtual water. Every ton of wheat arriving at a dockside carries with it, in virtual form, the thousand tons of water needed to grow it.

Only this trade in virtual water--bound up in grains and vegetable oil, sugar and cotton, meat and dairy products from animals raised on fodder crops--has kept the world fed. Its total volume is estimated at 20 times the annual flow of the world's longest river, the Nile.

Two-thirds of all the water abstracted from nature by humans is used to grow crops, mostly food. And nearly a tenth of all the water used in growing crops is traded internationally. More and more, the entire international food trade looks like a trade between the water haves and water have-nots.....

Read more: Whole article from Forbes
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