48 Like Us on Facebook: BetterFarmingON Better Farming | February 2024 Moe’s Market Minute PANAMA CANAL & GRAIN TRADE Will we 'feel the pinch' of shipping woes in 2024? By Moe Agostino & Abhinesh Gopal searagen - stock.adobe.com photo The Panama Canal is likely the most impressive man-made marvel. It connects the Atlantic Ocean to the Pacific Ocean via an artificial 82-kilometre waterway in Panama. It was created about a century ago to serve as a key route for seafaring trade. For a ship to be moved from one end of the canal to the other, canal locks lift it up to an artificial freshwater lake called Gatun Lake, which is 26 metres above sea level, and then lowers it at the other end. For a passing of a ship, about 200 million litres of fresh water is used. The canal significantly reduces vessel transit time. This massive engineering feat revolutionized global maritime trade, especially that of North American exports to Asia. In fact, the United States (U.S.) was the main financer, backer, planner and builder of the canal in the last century. About a couple of decades ago, the U.S. handed over the running of the canal to Panama authorities. Given the finely balanced nature of the artificial canal, its success depends entirely on the ability of the manmade Gatun Lake to supply the necessary (massive) amounts of water to move the huge vessels from one end of the canal to the other – in essence, move it from one ocean to the other. This means that the canal operations are acutely influenced by drought conditions in Central America and specifically on Gatun Lake. The 2023 El Niño weather pattern and dry conditions did not just impact the Panama Canal but also the mighty Mississippi and the Amazon River. Authorities had no choice but to reduce the number of ships on the canal due to the dropping water levels. The drought reduced Panama Canal flows by five per cent in 2023, slowing the global trade of goods. It is estimated that about three per cent of global seagoing trade uses the Panama Canal for their transit, with bulk trading that includes grains taking up the majority of the trade. Supposedly, over half of the tonnage that uses the Panama Canal for shipping is from trade between the East The Panama Canal’s operations are influenced by drought conditions in Central America.
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