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The Telegraph
The Telegraph
12 Dec 2023


Dry January as California and Chile wines hit by unseasonal drought in the Panama Canal

Drought in the Panama Canal could make finding Chilean or Californian wines in the supermarkets more difficult in the new year, experts have said.

Despite this time of year usually being a period for heavy rainfall, The Panama Canal Authority has been restricting the number of vessels allowed through the 51-mile waterway since summer, after a drought began to affect the lock system.

Wines produced in Chile and California are often transported via the canal.

While several retailers reassured The Telegraph that the delays will not reduce wine supplies before Christmas, experts voiced concern that shelves could be more sparse by January.

A satellite image shows the queue of vessels waiting to use the Panama Canal
A satellite image shows the queue of vessels waiting to use the Panama Canal

Marco Forgione, director general of the Institute of Export & International Trade, said Britons could be forced to change their drinking habits as a result.

He said: “The UK could be in for a dry January next month, whether we choose to partake in the annual challenge or not. 

“Because of global shipping delays, supplies of our favourite Californian chardonnays and Chilean merlots, which make their way to us via the Panama Canal, could be badly affected.

“Given the UK is the second biggest importer of wines in the world, the second biggest global market for US wine and the third biggest for Chilean, the impact of delays along all parts of the supply chain could be profound.”

Chile produces 1.2 billion litres of wine a year
Chile produces 1.2 billion litres of wine a year Credit: ROBYN BECK / AFP

Mr Forgione added that the delays could reduce exports from the UK to Hong Kong, Singapore and France and called on politicians to introduce a strategy to protect supermarket supplies.

Rebecca Palmer, head buyer at wine merchant Corney & Barrow, said: “Moving forward, there may be some issues, we don’t know at the moment, apparently water levels are low, slowing down traffic through the canal, so we may extend lead times, but we will be guided by our freight forwarders.”

Corney & Barrow said it was not possible to use other routes as the costs involved would be “huge”.

iPhones, fruit and veg

Other popular consumer goods, including iPhones, fruit, and vegetables, also travel to the UK through the Panama Canal.

Up to £18 million worth of fruit from Peru could be disrupted by the delays, which could cause shortages on supermarket shelves, researchers from retail analysts Russell Group said.

The number of vessels travelling through Panama Canal in the first week of December dropped from 238 last year to 167
The number of vessels travelling through Panama Canal in the first week of December dropped from 238 last year to 167 Credit: LUIS ACOSTA/AFP via Getty Images

Only 22 daily transits through the passage connecting the Atlantic and Pacific oceans are currently being allowed by the canal authorities, down from a typical average of 34 to 36. This is likely to fall further in February, to around 18 ships a day.

Approximately 167 ships crossed through the canal in the first week of December this year, according to trade analysts MarineTraffic, compared to 238 in the same period in 2022.

The Panama Canal, which was completed in 1914, moves up to £213 billion in cargo annually, including 40 per cent of all US container traffic.

Chile produced 1.2 billion litres of wine last year, of which two thirds was exported, while the US exported nearly 300 million litres of wine, with the state of California responsible for up to 80 per cent of the wine produced in the country.

A spokesman for the Department for Business and Trade said that while just 0.5 per cent of UK imports flow through the Panama Canal, it was working with international partners to build reliable supply chains.

‌The spokesman added: “We will publish a new Critical Imports and Supply Chains Strategy shortly.”