Panama Canal drought
Under review: something we watch has changed (aCP ADVISORY CHANGE). The figures stand until the review is done.
What is happening
The Panama Canal is short of water again, so fewer ships are allowed through each day. It happened in 2023–24 and is happening again in 2026.
In a normal year about 33 ships a day cross. Bulk carriers (grain) and tankers lose their slots first; container ships keep theirs (Jan 2024: bulk carriers −77%, containers −14%).
Three ways it could go
Calm case · Rains Hold
Enough rain falls and the canal opens up again. Ships cross at about the normal rate and freight goes back to normal. The September 2026 easing is the first step; it is not yet a recovery.
We put the chance of this at about 1 in 5 (unlikely).
Middle case · Managed Dry Season
The canal keeps rationing through the January–April 2027 dry season, much as it did in August and September 2026: fewer slots, shallower ships, longer waits for anyone without a booking.
We put the chance of this at about 1 in 2 (roughly even chance).
Severe case · 2024 Repeat
The dry season is as bad as in 2023–24: the canal cuts crossings by about two fifths. In that drought, grain freight from the U.S. Gulf to Japan ended the year only about 3% above normal, because the rest of the dry-bulk market was weak.
We put the chance of this at about 1 in 3 (unlikely).
Which sectors are exposed
This is a crisis we watch, not one we score: we give no sector or holding a figure for it, because the shares we tested did not react to it. That does not mean a portfolio is safe from it.
How sure are we?
We are sure about the ships: they are counted every day. We are not sure what it means for share prices, because the shares we tested did not react, so we give them no figure.
What to watch next
- Daily ship crossings at the Panama Canal (IMF PortWatch): a fall below three quarters of the 2022 level
- New Panama Canal Authority advisories on slots or maximum draft
- NOAA El Niño outlook for the January–April 2027 dry season
Your own holdings
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Insights · Help · Methodology
We measure the risk. You make the call.
DELAX describes exposure. It is not investment advice.