Date of Original Version
Abstract or Description
Virtual water trade is the hidden flow of water when food or other commodities are traded from one place to another. For instance, it takes 40 liters of water on average to produce and ship one slice of toast. When a country like Israel imports a slice of toast, it indirectly imports 40 liters of water on average. The precise volume of virtual water in any commodity is affected by climatic conditions and agricultural practice (Allan 2).
Aggregate virtual water trade is a good indicator of how strong a country’s agricultural sector is and how much agricultural products are consumed in the origin country and how much are exported abroad. Aggregate virtual water trade is also a strong indicator of how economically and environmentally sound a country is. When countries import large amounts of virtual water, it may indicate that the country’s economy is strong and the country can engage in international trade (Allan 19). Countries that import more virtual water than they export may be in a water deficit – its freshwater sources cannot sustain its inhabitants’ water needs. Still, relatively few people understand the concept or realize its significance to the world’s economy and the natural environment.