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Panama Canal delays puts millions of corrugated boxes of South American export fruit at risk

The Panama Canal delays may lead to corrugated box shortages during the crucial South American peak harvest and export period of January to March 2024. This warning comes from Luis Alberto Jaramillo, Commercial Director for Industria Cartonera Ecuatoriana S.A. from Ecuador. “I see problems especially in January, as some importers are already changing routes to the southern cone to avoid the Panama Canal, which would take three more weeks.”

Photo: Panama Canal Authority

He knows of a large banana company that has already made plans to move paper to avoid shortages. “According to first-hand knowledge I know of a case of a banana multinational that had to move containerboard paper from the east coast to the west coast of the USA by rail and then ship it to South America to avoid a shortage of boxes now in December. This situation applies to Ecuador, Peru and Chile too,” says Jaramillo.

“In Ecuador, a production of 400 million boxes is estimated for 2023 between exports of bananas, plantains, the local market and rejections. Between 29-31% of the entire volume is consumed in the first quarter of the year because it is high season. Due to excess imports in 2022 and the progressive drop in containerboard paper prices in 2023, all corrugators have reduced inventories throughout the year. At the moment inventories are at the lowest level and there are already delays in the arrival of paper due to the situation of the Panama Canal, remember that this is imported from the east coast of the USA and Europe because kraftliner and white top kraftliner should be use in agricultural boxes,” explains Jaramillo.

The Panama Canal Authority continue to warn of the ongoing drought and lack of rain leading to lower water levels and the need to balance fresh water availability for the population of the country. It has also adopted several measures to save water while shipping lines have paid millions of dollars to jump the line for the limited slots to pass. The authority warns a long season with little rain is still ahead.

For more information:
Luis Alberto Jaramillo
Industria Cartonera Ecuatoriana S.A.