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Panama Canal expects shifts in global trade patterns

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Changes in global trade, the future of LNG markets, the need to increase quality in Panama’s bunkering market, and the Panama Canal’s water supply project were among the topics discussed in a Seatrade Maritime News webinar.

Leading Panamanian officials and executives came together in the webinar ‘Panama Canal 2020-Challenges and Opportunities for the Decade Ahead’, sponsored by GAC-Panama and Monjasa. 

A change in global trading patterns with more focus on regional trade was highlighted.

At the Panama CanaI, “in the long-term, we see a more regional than global trade because of trade differences generated by tensions between the US and China and the post Brexit, changes that could shift more transits from Asia to Europe, but also more efficiency in shipping and more consolidations [in shipping],” said Panama Canal Administrator Dr Ricaurte Vasquez.

The Covid -19 panademic has impacted the canal’s customers and the waterway introduced some relief measures early this year and will continue with them in 2021.

 Asked of there would be tolls increase in the short-term, Vasquez said that the Canal provides value and “we are looking at what customers need and pricing business accordingly. We will not discard the possibility in next years.”

 The impact of climate change and its consequences in the form of natural disasters with higher recurrence and severity, and changes in weather patterns both affect water availability for the key the waterway .To address these issues, the Panama Canal is going to make a major capital investment for a global integrated solution that will assure water supply for canal operations and local consumption for decades ahead.

 “We have looked at all options [to guarantee water] for the next 50 years”. It is a resource that must remain under Canal control and we will get a portfolio of solutions to be able to begin works by 2022 during the dry season,” he said. The project estimated at a cost of $2bn will be financed by the Canal’s own cashflow and market financing if required, he added. “The water has a value, we generate value and will have to introduce charges.” 

In September, the Canal called a Request for Qualifications for the water project, and will announce the pre-qualified companies early 2021. The companies will have several months to present their proposals before the end of the year.

Akira Kunimatsu, evp of LNG and Offshore, MOL Americas, projected that LNG transits through the Canal might be impacted in the future depending on the relations between the US and China. LNG vessels could be diverted to Europe if these relations do not improve.

Looking to bunkering in spite of a decrease of 30% during the months of March to July because of the pandemic, refuelling in Panama never stopped, said Rasmus Jacobsen, Monjasa managing director Americas. “In fact, we grow our volumes this year.” “We need [in Panama] to increase quality, quality in the tankers we use and be more product-focused,” he added.

Alexei Oduber, managing director for GAC-Panama, praised the Panama Canal and Panamanian authorities for steeping up in allowing crew changes. “We need to be more creative [in shipping services]. The key is Panama adaptability which has been very effective.” 

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