The capacity of the Panama Canal is severely limited

Due to unprecedentedly low water levels on Lake Gatun, the Panama Canal Authority is limiting the number of daily vessel trips to a minimum of 18 vessels per day by February 2024.

Water levels in Lake Gatun, which is the canal's source of water, are currently 7% below the October average of the previous five years.

The maximum sustainable capacity of the channel is 38-40 transits. The administration has taken a number of measures to save and conserve water, including reducing transit capacity to 32 vessels effective July 30. Additional cuts were announced on September 29.

“Despite all the measures taken, the level of Lake Gatun continues to decline to unprecedented levels for this time of year,” the Canal Authority said. “Recorded rainfall in October was the lowest on record since 1950 (down 41%) and 2023 currently ranks as the second driest year for the same period.”

The USDA noted that the reduction in transit coincides with the U.S. grain harvest and increased shipping demand. Reduced canal capacity could result in grain exports from the Persian Gulf being redirected to other routes such as the Suez Canal, the report said.

In 2022, ships carrying 36.18 million tons of grains, including corn, soybeans, rice, sorghum, barley and wheat, transited the canal from the Atlantic to the Pacific Ocean, while 2.2 million tons moved from the Pacific to the Atlantic. . Grain ranks second after oil among goods whose production depends on the canal.