Good Rains Could Ease Water Restrictions
18 June 2018 | SA Views | Dwaine van Vuuren
 


More excellent inflows last week boosted dam levels 6.3% to 38.1% versus the 24.4% registered at end of June last year.

This year is turning out "above average" when looking at the last 5 years net dam inflows, which is obviously a function of reduced consumption (water restrictions) and good rainfall:

image1

We are currently running on average a fairly consistent 4.5% per month above the 5-year net inflows average and if we assume this trend continues, we can forecast a best case scenario of finishing up this season with a healthy 72% dams capacity - almost identical to what we finished up with in 2015 and a good deal more than the 37% we finished up in 2017. On the other hand, we could assume we fall to the 5-year average net inflows for the remainder of the season, taking us to 55% capacity at the end of the season. A shaded forecast depicting the progress of these two scenarios is displayed below, and we are likely to finish up somewhere in this area barring a sudden change in rainfall:

image2

The best-case scenario would allow us to start the 2018/19 season off with 656 million cubic meters versus the 332 million cubic meters we started the 2017/18 season with. That’s an additional 323 million cubic meters which will not only allow us to avoid agricultural water restrictions (100 million cubes last season) but even allow for a slight relaxation in water restrictions.

The lower forecast will allow us to start 2018/19 with 494 million cubic meters, some 162 million cubes more than last season. This will allow us to avoid debilitating agriculture restrictions (which really hurt our GDP numbers), but most likely city water restrictions will remain in force, as we can’t be guaranteed 2019 winter rainfalls will also be normal.

Either of these scenarios are far better than last year. We just need to keep saving water through winter and hope the normal rainfall patterns continue.

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Dwaine
Dwaine van Vuuren
Retail-side Research
RecessionAlert, Sharenet Analytics

Dwaine van Vuuren is a full-time trader, global investor and stock-market researcher. His passion for numbers and keen research & analytic ability has helped grow RecessionALERT.com (US based) and PowerStocks Research (now Sharenet Analytics) into companies used by hundreds of hedge funds, brokerage firms, financial advisers and private investors around the world. An enthusiastic educator, he will have you trading and investing with confidence & discipline.


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