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Shipping must brace for less cargoes transiting the Panama Canal and across many rivers worldwide, while container carriers face the prospect of losing more boxes overboard in the Pacific as the El Niño weather pattern takes hold later this year. Climate scientists warned this month there is now a 90% chance of an El Niño weather phenomenon appearing through the end of this year and the first months of 2024. And they are warning it could be a strong one. The climatic event, already visible in warming Pacific temperatures around the equator heading towards South America, could have drastic effects from searing heatwaves to stronger storms with much of Asia already suffering this year from extreme heat. During El Niño, warm water is pushed back east, toward the west coast of the Americas, affecting global weather patterns. The warmer waters cause the Pacific jet stream to move south of its neutral position. The deck is potentially stacked for a really big El Niño "We're projecting an above 90% probability that there will be El Niño conditions through the winter," said David DeWitt, director of the US National Oceanic and Atmospheric Administration's Climate Prediction Center. "There's an 80% probability that we're going to be in El Niño in July.” “A warming El Niño is expected to develop in the coming months and this will combine with human-induced climate change to push global temperatures into uncharted territory,” said Petteri Taalas, secretary-general of the World Meteorological Organization, in a statement earlier this month. “This will have far-reaching repercussions for health, food security, water management and the environment. We need to be prepared.” A report on the economic impact of El Niño, published by researchers from Dartmouth College in the US this month, showed how trillions of dollars are at risk. Lead author Christopher Callahan commented: "The deck is potentially stacked for a really big El Niño. Our results suggest that there will likely be a major economic toll that depresses economic growth in tropical countries for potentially up to a decade. The result could be trillions of dollars in productivity lost globally relative to a world without this El Niño.” Liner shipping has recently congratulated itself on how few boxes the industry has lost overboard in recent months, a safety record El Niño could put under threat. Mexico’s National Meteorological Service is predicting a much busier storm season in the Pacific: between 26 and 38 storms, with as many as nine of them turning into Category 3 hurricanes or stronger. In the past week further draft restrictions have been put in place at the Panama Canal, where the spectre of El Niño looms large. With rainfall dropping by 50% compared to recent averages from February to April, the Panama Canal Authority has been forced to institute two draft restriction measures. Further restrictions are possible with meteorologists warning water depths in Lake Gatun, which is in the centre of the canal, could hit historic lows by July. The restrictions now in place mean some boxships will need to travel across the waterway with 40% less cargoes. What makes this year’s dry spell more concerning is that meteorologists are forecasting the imminent onset of El Niño, a weather pattern that typically brings drier-than-normal conditions across much of Central America. The last serious El Niño event in 2016 saw repeated Splash headlines about draft restrictions along the waterway. Burak Cetinok, head of research at broker Arrow, said that disruptions to shipping from El Niño would only become apparent in the coming months. “That being said, global warming is already having a more visible and significant impact on shipments,” Cetinok told Splash Extra, taking Argentina's draught as one example. The drought earlier in the year destroyed almost 50m tonnes of grains in the country. Considering about 48% of grain tonnes and over 60% of grain tonnes-miles out of Argentina is carried by panamaxes, the impact on demand has been “outsized”, Cetinok said. At this point in the year, typically around 3% of panamaxes are carrying grains loaded in Argentina. That has dropped to just 1% this year. “It looks like weather disruptions related to global warming will have a more significant impact on global shipping moving forward,” Cetinok said. Khalid Hashim, managing director of Thai dry bulk owner Precious Shipping, said the extreme heat already hitting Asia has seen a greater movement of coal, while impacted farming areas is leading to disrupted grain trades, and longer distances travelled for grain. Malaysia's crude palm oil production could drop between 1m and 3m tonnes next year due to El Niño, the Malaysian Palm Oil Board (MPOB) said last week, one of many Asian bodies warning of reduced agricultural output this year.

Shipping braces for El Niño

Meteorologists warn there’s a 90% chance of the severe Pacific weather phenomenon hitting this year with widespread repercussions for shipping.

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