Panama Canal plans more ship transit cuts

The Panama Canal is planning further cuts to ship traffic from October as El Nino-linked drought strains the water supplies needed to operate the waterway.

Canal authorities cut daily transits from 36 to 32 on September 4 to preserve water. A draft budget submitted to Panama's parliament would reduce traffic further to an average of 29.5 transits a day from October.

Panama has declared a nationwide emergency over El Nino, a weather pattern developing over the Pacific Ocean that is affecting weather worldwide and pushing up global temperatures. The resulting drought in Central America is a major problem for the canal, which uses water to power the locks that lift and lower ships during crossings.

About 5 percent of global trade passes through the Panama Canal. In 2023, El Nino forced daily transits through the canal down from 38 to 22.

This year's El Nino is expected to be the strongest since record-keeping began four decades ago. Traffic through the canal has increased during a standstill in the Strait of Hormuz amid the US-Israeli war on Iran.