Due to the drought in the Panama Canal, one of the world's most important trade routes may become inefficient
The severe drought in the Panama Canal that began last year and continues to this day has called into question the effectiveness of one of the world's most important trade routes. The country's authorities are increasingly having to reduce the number of ships traveling through the waterway.
According to estimates by the Panama Canal Administrator Ricarte Vazquez, the lowering of the water level could cost the budget between $500 million and $700 million in 2024, ABC News reports. Previously, it was expected that financial losses would not exceed $200 million.
It is reported that the Central American country is now experiencing the effects of one of the worst droughts to ever hit it.
This has caused congestion of vessels, so their number has been reduced from 24 to 38 boats that ply the canal daily.
Due to the unreliability of waterways, the world may face supply delays and excessive transportation costs.
Ricarte Vazquez said that in the first quarter of the fiscal year, 20% less cargo and 791 fewer ships passed through the canal than in the same period last year.
Currently, the Panamanian authorities are focused on how to address the drought caused by climate change and protect the people from future shortages of drinking water.