The Panama Canal has capped the number of ships that’ll pass through it.
REUTERS/Rafael Ibarra
The Panama Canal’s income could fall by $200 million due to a lack of rainfall, its administrator said Thursday.
It’s capped the number of ships that can pass through due to this summer’s drought.
“If we don’t adapt, we are going to die,” Ricaurte Vasquez said, per France 24.
The Panama Canal is suffering from an intense drought which is forcing officials to cap the number of ships that can pass through the vital waterway.
Administrator Ricaurte Vasquez said Thursday that operators had decided to allow a maximum of 32 ships a day through the canal, down about 14% from a norm of between 36 and 38.
He said the canal’s income could fall by as much as $200 million a day next year as a result of the loss of traffic.
The canal system relies on freshwater, rather than seawater, meaning that poor rainfall this summer has affected the canal’s ability to operate.
“The big disadvantage that the Panama Canal has as a maritime route, is that we operate with freshwater, while others use seawater,” Vasquez told a media presentation, per France 24.
Meteorologists are warning that the El Niño climate pattern, which can cause drought and flooding to happen in the Pacific at the same time, could worsen the situation for the canal, according to the outlet.
“We have to find other solutions to remain a relevant route for international trade. If we don’t adapt, we are going to die,” Vasquez said.
Shipping companies use other routes if the restrictions carry on, he added.
The 51-mile canal connects the Atlantic and Pacific oceans, which has historically made it a vital trade route.
It had expected to bring in fees of around $4.9 billion in 2024 before the drought, according to Vasquez.