Overview The ABARES water market outlook focuses on prices for water allocations within the southern Murray-Darling Basin (sMDB). A brief summary of market conditions prevailing in 2018-19 is provided along with an outlook for prices in 2019-20. Due to the possible market sensitive nature of the results, only general key findings are presented below. Key Issues Allocation prices have been high in 2018-19, but understandable given the hot and dry seasonal conditions. Water availability levels have been at their lowest level since 2009-10 (taking into account allocations, carryover and water recovery under the Basin Plan). A range for possible allocation prices for 2019-20 under 'dry', 'average' and 'wet' scenarios are presented in the report. While prices rise under the dry scenario, a repeat of prices seen at the peak of the Millennium drought (2007 to 2009) are unlikely in 2019-20. Under the wet scenario prices are expected to fall significantly from their current levels. Allocation prices higher or lower than the range presented in the report are possible if conditions are drier or wetter than the scenarios considered. Depending on seasonal conditions, it is also possible that the Murrumbidgee Inter Valley Transfer will restrict trade into the Murrumbidgee leading to higher prices in that region compared to elsewhere in the sMDB. Water demand in the lower Murray has increased, but this is not unexpected. Recent growth in water demand (particularly for new almond plantings) remains within the bounds of scenarios presented in previous ABARES research.