The Panama Canal expects its revenue to shrink by about $200 million in its next fiscal year due to crossing restrictions meant to save water as a consequence of an unprecedented drought, its administrator announced on Thursday.
The projected losses come as the transoceanic waterway key to moving hundreds of billions of dollars in global trade each year expects its daily average for cargo ship crossings to slide by about 16%.
Specifically, between 30 and 32 ships are expected to cross daily during the new fiscal year which starts in October, said canal administrator Ricaurte Vasquez at an event.
That compares to the 36 to 38 ships that transit the waterway when it operates at full capacity.
The $200 million cut would reduce the canal’s revenues for the 2023-2024 fiscal year to $4.9 billion.
Last month, the canal’s administrators extended restrictions on the maximum depth for ships and limited average crossings to just 32 vessels per day due to the abnormally dry weather.
Panama typically sees heavy rains in July, and the canal authority has called the lack of precipitation “historically unprecedented.”