HomeTopicsBusinessEl Niño Squeeze on the Panama Canal Could Raise Costa Rica Import...

El Niño Squeeze on the Panama Canal Could Raise Costa Rica Import Costs

Costa Rica’s supply chain for animal feed and flour is exposed to the slowdown at the Panama Canal, where drought linked to El Niño has forced authorities to limit how many ships can cross each day, according to trade and logistics specialists. The Panama Canal Authority set daily transit slots at 33 starting Oct. 15, up from 32, citing near-average rainfall and water-saving measures in the locks.

It said the water deficit in the canal’s watershed continues. Before the restrictions, the canal typically handled 34 to 36 transits a day. The locks run on water stored in Gatún and Alhajuela lakes, which depend on rainfall in the canal watershed. Costa Rica relies on the canal mainly to bring in raw materials. Most of its exports leave through its own Atlantic and Pacific ports or by air.

The most exposed imports are yellow corn, soy and wheat. Corn and soy are the base of feed for chicken, eggs, pork and milk, while wheat goes into flour and bread. Costa Rica imported about 1.13 million metric tons (1.25 million short tons) of yellow corn in 2025, mainly from the United States, according to the export promotion agency Procomer.

It also imported more than 277,000 metric tons (305,000 short tons) of soy, mostly from the United States, and about 278,000 metric tons (306,000 short tons) of rice, mostly from Brazil. Rodney Salazar, president of the Costa Rican Chamber of Foreign Trade (Crecex), said exposure is highest for bulk grain shipped from US Gulf and Atlantic ports to Caldera, the country’s main grain terminal.

If the restrictions persist, he said, the likeliest effects are longer transit times, higher transport costs and rescheduled shipments rather than empty shelves. Salazar said it is premature to speak of a general supply risk and recommended close monitoring of grain and animal feed chains.

Erick Ulate, executive director of the Free Consumers Association (ACL), said import prices are negotiated months in advance, so no major price increases are expected in the short term. If the situation continues or worsens, he said, higher freight costs could reach consumers, especially for foods already affected by El Niño.

Óscar Álvarez, a foreign trade specialist, said reduced transits mainly affect imports of fuel, grains, fertilizer, containers, vehicles and raw materials. Consumers could face tighter supply and higher prices, particularly for fuel, food and goods from Asia, he said. Helmut Dorsam, president of the Costa Rican Shipping Chamber (NAVE), said Asian imports would be hit hardest. A ship from Asia bound for Limón through the canal might have to try to reach Caldera instead or skip port calls, he said, and some cargo may need to be transshipped at added cost.

Dorsam said importers will likely increase their safety stock, which also raises costs. Jaime Morales, senior manager of global trade at EY, said a widespread impact cannot yet be claimed but advised companies to watch daily transits, authorized ship drafts and any new water conservation measures. Because logistics companies are willing to pay more to reduce risk, he said, the effect may show up more in costs than in shortages of specific products.

Alternatives exist as much of the cargo from Asia can enter directly through Puerto Caldera on the Pacific without crossing the canal, and goods from Europe or the US East Coast can arrive through Limón-Moín on the Caribbean. Other shipments can be transshipped in Panama and trucked into Costa Rica through the Paso Canoas border crossing.

How long the squeeze lasts depends on rainfall. Costa Rica’s National Meteorological Institute (IMN) expects El Niño to reach peak intensity between November and January, as the dry season sets in.

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Steven Hodel
Steven Hodelhttp://www.globaltennisnews.com
Steven Hodel is the Tennis Correspondent for The Tico Times, covering the ATP and WTA tours and Latin American players from his base in Costa Rica. He is also the founder and editor of Global Tennis News. Reach him at steve@ticotimes.net or on X at @theticotimes.
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