Panama taxes and rising grain transportation costs: what it means for the agricultural sector

The cost of grain transportation by large ships, including the so-called panamax, has increased significantly in recent months. This was the result of several factors affecting the international shipping market. Panamaxes are large dry cargo ships that fit within the dimensions of the Panama Canal and have significant capacity to transport grain around the world.

One of the main factors in the increase in the cost of transportation is the shortage of vessels on the market. As a result of the COVID-19 pandemic, many flights were canceled in 2020, which led to a temporary decrease in fleet activity. Now that global trade is recovering, demand for shipping has increased as the global economy recovers, leading to a shortage of free ships.

In addition, economic instability in some regions of the world, such as South America and Asia, led to an increase in grain imports. This has put additional pressure on the global shipping market and made it more expensive for all participants.

According to the data of international analytical agencies, the cost of panamax charters increased by 30% over the last quarter. This growth affects the agricultural sector in many countries, in particular in Ukraine, which is a major grain producer. An increase in the cost of transportation may lead to an increase in the total cost of exporting Ukrainian grain and affect its competitiveness on the world market.

The recovery of the global economy and growing demand for grains continue to stimulate sea freight prices. For the agricultural sector, this means the need to adapt to new market conditions and search for more effective logistics strategies.