US – The decreasing transit capacity of the Panama Canal due to a severe drought in its watershed has set off alarm bells for fresh produce importers, particularly concerning table grapes destined for the East Coast of the United States.
This reduction, implemented by the Panama Canal Authority to navigate the lower freshwater levels, is prolonging vessel wait times and potentially affecting both the quantity and quality of incoming produce.
The impact according to a report by Fresh Plaza, could be profound, especially considering the significant role the Panama Canal plays in expediting shipments, notably from Chile and Peru, the primary suppliers of table grapes to the East Coast ports.
“Currently, almost three-quarters of Chile’s grape shipments and a substantial 85 percent from Peru enter the United States via East Coast ports,” outlines the report.
The Port of Philadelphia receives over 90 percent of these shipments, making it a critical entry point. The disruptions in the canal’s capacity might force shippers to explore alternative routes, such as redirecting shipments to west coast ports or opting for longer transits around Cape Horn.
However, these options would inevitably add transit time, potentially impacting the freshness and volume of the produce upon arrival.
Meanwhile, the global apple production forecast for 2023/24 anticipates a slight uptick, driven by recovering supplies in various regions, including China, South Africa, and the United States. However, the European Union and Turkey face losses in production.
China production is forecast up 500,000 tons to 45.0 million as higher output in the provinces of Shanxi, Henan, Hebei, and Liaoning more than offsets frost and temperature‐related losses in Shandong and Gansu provinces.
Acreage continues to decline due to a policy encouraging or requiring certain farmland (as defined by government regulations) be used for other crops.
However, growers are working to optimize production in existing orchards; it is estimated that nearly 20 percent of apple growing area is now made up of high‐density plantings of dwarf trees.
Exports are anticipated to rise 71,000 tons to 845,000 as increased supplies boost shipments to Asia markets. Imports are projected down 15,000 tons to 80,000 on reduced shipments from New Zealand following damage from Cyclone Gabrielle in February 2023.
Considering the situation, Holt Logistics Corp. has expressed confidence in the timely arrival of Chilean fruit, assuring that their slots are secured with reliable container lines despite the Panama Canal’s reduced capacity.
Yet, concerns linger among exporters, especially regarding the upcoming peak months of January and February for Chilean shipments.
While assurances exist, reports suggest that an insufficient number of ships diverting from the Panama Canal to offset the drop-in reservation slots could escalate ship wait times, potentially exacerbating the situation for fresh produce imports.
The ramifications of this reduced capacity at the Panama Canal pose a substantial challenge to the supply chain of fresh fruits and vegetables, urging stakeholders to navigate contingency plans to ensure minimal disruptions to the market.
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