The Panama Canal could earn $225 million to $400 million less in net revenue during its 2027 fiscal year under one scenario for the developing El Niño, a Canal finance official has said. The estimate is a projection, not a loss already recorded or a formal revision to the waterway’s proposed budget.
David Sedda, a financial controller in the Canal Authority’s finance division, presented the figures at a discussion hosted by the Panamanian Association of Business Executives, according to La Prensa, which reported his remarks on September 18. He said revenue from auctions and other charges could partly offset the effect of carrying less cargo and handling fewer ships.
The Canal began limiting daily transit slots earlier this month as below-average rainfall reduced water flowing into its watershed. Its announced limit fell to 32 slots a day on September 15. Each transit uses freshwater from lakes that also supply communities in Panama.
Sedda said the authority projects 10,750 deep-draft ship transits in the fiscal year beginning October 1. That is about 1,265 fewer than in fiscal 2025. Projected cargo volume is also lower, although the eventual result will depend on rainfall, shipping demand and how operators respond to the restrictions.
The warning comes shortly after the Canal submitted a proposed 2027 budget forecasting $5.555 billion in revenue and a $3.608 billion direct contribution to Panama’s Treasury. That proposal already takes difficult water conditions into account. Sedda’s scenario should therefore not be read as a newly announced $400 million cut to the Treasury forecast.
He also pointed to a longer-term concern: shipping companies need confidence that they can plan routes through Panama. Auction income may help offset fewer transits in a dry year, but it does not remove the operational uncertainty created by limited water.
Sources: La Prensa, PCA Budget
