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Dried-up Panama Canal crushed global timber amid Red Sea tensions
Posted on February 16, 2024 |
Severe drought conditions have led to the potential closure of the Panama Canal, impacting global shipping routes significantly.
China, a prominent supplier of plywood, has diverted its shipments through alternative routes, affecting markets in Australia and New Zealand.
The annual cargo movement through the Canal amounts to $270 billion, with 40% of US container traffic and 5% of global maritime trade utilizing it.
US East Coast ports export 125.6 million long tonnes of cargo, with 64% bound for Asia, while importing 61.1 million long tonnes, 68% originating from Asia.
Gulf Coast ports exported $8.9 billion worth of agricultural products to Asia, and US West Coast ports sent 3 million long tonnes to Europe via the Canal.
A significant decrease in rainfall levels resulted in the driest October in 70 years, prompting restrictions on ship passage by the Panama Canal Authority.
The three primary users of the Canal are the US, China, and Japan, with the US accounting for 72.5% of all ships' destinations or origins.
China's Belt and Road strategy enhances its control over the waterway, contributing to geopolitical tensions amidst reduced capacity, and limiting daily slots to 24.