Draught in China has just left five million people facing a water shortage, and more could be affected by year-end. This comes as a harsh reminder that a global water crisis is still approaching and that companies which can help solve water-related problems have massive growth ahead.
AFP: The drought, which has hit an area stretching from Inner Mongolia region in the north to Jilin province in the northeast, has lasted since late July, the agency said. In Liaoning province, next to Jilin, the situation is the worst in 60 years, with half of all arable land having dried up, Central China Television reported earlier on its website. Meanwhile, the risk of another drought is emerging in the provinces of Hubei and Hunan in central China, which have been hit by a combination of low rainfall and high temperatures
For some places water will always be abundant, but for many the future is bleak. China is especially caught in a bind given that agriculture counts for about 80% of human water consumption globally, yet China aims to be more self-reliant in terms of food production. The problem also has a lot to do with people rising out of poverty and eating more meat-rich diets, which isn’t something you necessarily want to curtail. Thus India has a lingering water crisis in certain regions as well.
Nevertheless, water is available and the problem is solvable. Russia, for example, has 20% of the world’s fresh water. The challenge is to put in the right infrastructure and establish market mechanisms where needed.
That’s where water stocks come in. Over the last few years, interest in water crisis counters has gone from hot, to cold, to lukewarm. Should this year’s water problems prove particularly severe, perhaps they’ll be back on the radar like the good old days.
Here’s a short list of water-related stocks below, which is by no means exhaustive. Feel free to suggest other names that are A) water related and B) international or a China/India pure play.
- Pentair (PNR)
- Duoyuan Global Water (DGW)
- Veolia Environnement (VE)
- Suez (SZE)
- Watt’s Water Technologies (WTS)
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