15 October 2018 

Panama Canal head, Jorge Quijano, told Reuters on 14 September that “most cargoes passing through the Panama Canal come from or go to the United States and China,” adding that “tensions between them could ultimately have an impact on the number of loadings using the waterway in any direction”. But he also said that he expected more cargo from Brazil as farmers in Mato Grosso, an important soy producing state, earlier this year signed a memorandum of understanding with the Canal to send through Panama volumes of soy that were previously shipped across the Atlantic and Indian oceans. According to Quijano, major imports of LNG from United States to Mexico and Japan could also replace losses resulting from the United States-China trade dispute.

Analysis

The main factor of risk for Panama is the trade dispute between the United States and China. The declarations to Reuters by the head of the Panama Canal (see above) do not appear to be conclusive as Brazil’s soy and United States’ LNG will not be able to replace the losses due to the United States-China trade dispute.

 

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