Panama Canal: New Threats to Global Trade

By Kazirangatimes  Published On: 22/08/2023

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Panama Canal plays a vital role to perform 80% of global trades and it connects Atlantic  and Pacific oceans.

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Most containers traveling through the Panama Canal are exported and imported from the United States, accounting for about 73 percent of all traffic via the canal.

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Every year, $270 billion worth of cargo, or 40% of all container traffic from the United States, passes through the Panama Canal.

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The Panama Canal Authority is taking efforts to address the problems brought on by climate change and a drought-like scenario.

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El Nio's warmer Pacific seas aggravate Panama's dryness. Rainfall deficits that are 30–50% below average in one of the driest years are what's causing the problems. 

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Despite the ongoing wet season, Gatun Lake, which is crucial for the canal's lock system, maintains below-average water levels.

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The Panama Canal Authority made the decision to decrease daily and maximum ship weights. It's a reminder of the canal's susceptibility to disturbances caused by the weather.

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Weather patterns are amplified by elevated water temperatures, which makes it more difficult to carry goods internationally and through the Panama Canal.

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The Ever Max, a vessel owned by Evergreen Marine, set out on a historic voyage through the Panama Canal. The ship was prevented from setting a record-breaking journey because of drought, which forced it to lose containers.

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Forty percent of all consumer goods are moved through container ships through the Panama Canal between Northeast Asia and the East Coast of the United States.

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Recent outages have an impact on a number of essential commodities, including Brazilian meat, copper, and cherries from Chile, American soybeans, and natural gas from the United States.

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Large ships encounter difficulties since canal operators have decreased the ship weight limits in response to decreasing water depths. 

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The Panama Canal issue highlights the importance of adaptability and flexibility in light of how climate change may affect infrastructure and trade routes.  

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