© REUTERS/Aris Martinez/File PhotoImporters warn of problems with supplies of perishable goods as Britain relies on the canal for fresh produce from Latin AmericaAnalysts warn countries such as Peru will struggle to maintain supplies if ships carrying refrigerated containers of fruit, vegetables and other goods such as coffee and meat are subjected to excessive delays on the Panama Canal
Falling water levels on the vital trade route between the Pacific and Atlantic oceans have led to a drastic reduction in the number of vessels able to pass through the canal, with dozens of ships forced to queue for weeks to secure a passage.
The delays, which will lead to the number of daily transits falling to half the normal pre-drought levels by February, have already led to warnings that Christmas goods from iPhones to exercise bikes and tree lights are set to fail to reach retailers in time for the festive season.
But import and retail experts are now warning of problems with supplies of perishable goods for supermarkets and other food stores as Britain and other European countries turn to South and Central America to maintain supplies of fresh produce - from asparagus to mangoes - during the winter months.
Analysts have warned that countries such as Peru face difficulties in maintaining supplies if ships carrying refrigerated containers of fruit, vegetables and other goods such as coffee and meat are subjected to excessive delays or diverted via longer shipping routes.
It is understood by i that several major retailers are closely monitoring the situation concerning fresh produce supplies through the Panama Canal.
Perishable goods from Peru worth £22m, including fruit with a value of £18m and scheduled to arrive in Britain for Christmas could be caught up in the Panama Canal restrictions, leading to potential shortages or reductions in supply for UK retailers, according to Russell Group, a London-brd shipping data analysis company.
Peru sends goods worth £2bn a year to the UK, including more than £350m of fresh produce ranging from prawns and mangoes to coffee, tea and cocoa.
The industry group representing UK importers and exporters have warned that a worse squeeze on goods from Central and South America is set to follow in the New Year.
Britain relies on the main harvest season in Latin American countries such as Ecuador, Chile and Peru from November to March to maintain supplies of fresh produce during periods of decreased winter production from locations such as Spain.
But delays on the traditional route via the Panama Canal could lead to shortages and increased prices for consumers if importers and retailers choose to pass on increased costs such as extended shipping times or even the payment of hefty premiums to jump shipping queues at the vital choke point between the Pacific and Atlantic.
The 50-mile long canal, which opened in 1914, allows shipping to avoid an 8,000-mile detour when transiting from one side of the Americas to the other. It is a short-cut for which some users are now willing to pay an eyewatering premium, with at one least shipping company reportedly agreeing last month to pay nearly $4m (£3.2m) to move to the head of the queue.
Marco Forgione, director general of the Institute of Export & International Trade, which represents some of Britain's largest importers and exporters, said: "During the vital months of November to March, much of South American shipping is focused on exports of fruit and vegetables, generally via refrigerated containers. For Peru, Chile and Ecuador, much of that produce will be routed via the Panama Canal.
"What is a major concern is post-Christmas if these issues continue, not only could the export of fruits and vegetables be impacted, but we could see extended transit times and squeezing up costs even more for UK importers."
With shipments of grain crops between the United States and Asia already facing delays of up to three weeks, shipping and freight forwarding companies have said the reduction in capacity on the canal is already affecting international supply chains.
Comment: Significant proportions of grain traded are used for livestock feed, which will be yet another pressure pushing up the cost of meat.
In normal circumstances, the canal can handle 35 transits by vessels every day. This has now fallen to an average of 22, with cargo ships also seeing a reduction in the number of containers they can carry to cope with falling water levels. As the drought continues, the number of daily transits is then expected to fall to 18 by February - about half the pre-drought figure.
Experts said producers and retailers are consequently facing another "supply-chain crunch" as they scramble to find ways of ensuring goods reach shelves in time for Christmas and beyond.
Suki Basi, managing director of Russell Group, said: "The current crisis in Panama could not come at a worse time for the UK. With the economy suffering from a lack of consumer confidence due to the cost-of-living crisis, another supply chain crunch will do little to boost that confidence.
"Shipping companies face a dilemma now, as they are forced to wait in the queue, and see their perishable items become ruined, pay a higher fee, or navigate alternative routes, extending delays."
Mr Forgione warned that increased transit times, which could add up to a fortnight to a journey between the Americas and Europe, could result in shipments of fresh produce arriving in an unsellable condition.
He said: "The commercial impact on businesses will also be significant if fresh produce is spoiled and wasted, delivery deadlines are missed, and cargo is stuck in ports ... Situations like this highlight the vulnerabilities in our UK supply chains and the need for solid strategies to be in place in order minimise the impact of future disruptions."
According to the Panama Canal Authority, which operates the waterway, the El Nino weather pattern has contributed to the worst drought in the region in 70 years, with October ranking as the driest month since records began in 1950.
The canal relies on a system of locks to allow vessels to cross its 50-mile length but, with each passage consuming as much water as half a million Panamanians use in a day, operators have been forced to take unprecedented measures by restricting access. Transits through the canal, which normally handles up to 14,000 vessels a year, fell by 20 per cent last month.
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