The Panama Canal is under the grip of a terrible drought. It disrupts international trade. A report of the American media New York Times has recently stated this.
Cargo ships come and go from Asia to different parts of the Americas through the Panama Canal. However, recently the water in the canal has reduced, and the movement of ships has been hampered. New risks have emerged in global trade. Due to the drought, the ships have to make many detours to reach their destination. Experts fear that the price of products will increase.
This 80 km long canal is made for import and export of goods. This hundred year old canal is connected with 1 thousand 920 ports of 170 countries. About 5 percent of the world’s cargo ships pass through the Panama Canal.
Due to the use of this canal, the cost of passage and movement of cargo ships is very low. But recently, the water level of the canal has started to decrease due to less rain there. The Panama Canal, which connects the Pacific and Atlantic oceans, is suffering from a 70-year drought. It is hindering the movement of cargo ships. Severe traffic jams have occurred.
Ships usually had to wait 3 to 5 days to cross this canal. Now that deadline has increased to 3 weeks. The number of waiting ships has also increased to 200. Experts say it is a major concern for global trade.
Experts say that America will be the most affected by the Panama Canal drought. It is feared that inflation in the country may increase if the water level of the Panama Canal decreases. If the cost of shipping, especially fuel increases, the price of goods will increase and the consumers will also suffer.
According to the US Department of Agriculture, 34 US grain ships transited the Panama Canal to Asia last October. However, at the same time this year, that number has reduced to five.
Reuters reports that the Panama Canal Authority has limited shipping due to drought. There are currently 22 ships plying daily instead of 35. Canal authorities say that if there is no heavy rain in the next 3 months, this number will be reduced to 18.