Panama Canal to cut daily transits further due to unprecedented drought

Daily vessel transits through the Panama Canal will be cut further from an already lowered rate starting 3 November, the Panama Canal Authority (ACP) says.

PHOTO: Port of Balboa at Panama's Pacific Ocean side. Getty Images

Booking slots to cross the canal, one of the busiest maritime trade routes, will be reduced to 25 between 3-6 November, and to 24 from 7-30 November, the canal authority says.

The region is experiencing record-low rainfall, resulting in unprecedented low water levels in Gatun Lake. The 430 square kilometres of Gatun Lake form a majority of the Panama Canal.

The daily transit limit of 32 vessel crossings, put in place since July, has been further reduced due to worsening drought conditions in the area. The drought conditions in the area have worsened, prompting the additional measures, ACP said.

"Despite all measures taken, the level of Gatun Lake has continued to decline to unprecedented levels for this time of year," ACP stated in its advisory on Tuesday.

This year so far has been the second driest year on record for Panama, with precipitation levels in October at their lowest since at least 1950, the ACP added.

Separately on Tuesday, the US Energy Information Administration (EIA) said that the drought in the Panama Canal and resulting delays have caused freight rates through the region for Very Large Gas Carriers to reach record highs. This has, in turn, increased the cost of shipping propane, or LPG, from the US, the EIA says.

"Higher demand for US propane in East Asia as a petrochemical feedstock is increasing demand for ship traffic through the Panama Canal and also contributing to the delays that are making this route a larger chokepoint," EIA says.

By Debarati Bhattacharjee

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