Greg Stanton, a research analyst at Intermodal, has examined the impacts of the El Niño phenomenon on maritime trade and coal demand. According to reports, the Panama Canal has eased its restrictions, reducing daily ship traffic to 32 frequencies in September. This reduction is only the second occurrence in the history of the Panama Canal. However, forecasts indicate that this easing may not be sustainable.
Effects of El Niño on Coal and Maritime Trade
The dry season is expected to begin in the second half of November, which could affect ship traffic and hydraulic balance at sea. Intermodal has predicted that the average daily ship traffic will reach 29.5 transits in the next fiscal year. Additionally, for the first time, the agency is selling long-term slots for old Panamax locks from January to early April 2027.
In the coal sector, the El Niño phenomenon has caused drought in Southeast Asia, resulting in increased demand for coal in India and Vietnam. However, India and China are expected to import less thermal coal this year as they tap into their domestic reserves.
Impact of El Niño on Agricultural Products
In agriculture, El Niño is expected to affect Brazil's crop yields in the 2026/27 season. Irregular rainfall in central and northern Brazil could lead to a decrease in soybean harvests, which will be influenced by heat and drought from November to January. Furthermore, any delays in the soybean cycle could postpone the second corn planting, posing a threat to Brazil's corn exports in the second half of 2027.
Ultimately, the Intermodal analyst noted that drought in the central dry corridor of the United States could increase grain imports from the Gulf of America. In Australia, due to drought in the spring, wheat harvests in the eastern states are expected to decline. The effects of this phenomenon extend beyond dry maritime trade and could also impact Indonesia's palm oil exports.
