Canal Authority's Limits Put Costa Rica's Costs at Risk

Costa Rica’s animal-feed and flour supply chains face higher transport costs as the Panama Canal Authority limits ship traffic amid drought. The authority raised daily transit slots to 33 from 32 starting Oct. 15. Before restrictions, the canal typically handled 34 to 36 transits a day. Decisions made far from the checkout counter could reach consumers.

The Bottleneck

The canal’s locks rely on water stored in Gatún and Alhajuela lakes, which depend on rainfall in the watershed. Drought linked to El Niño has left a continuing water deficit there, even as the authority cites near-average rainfall and water-saving measures for the increase in transit slots.

Costa Rica relies on the canal mainly for raw-material imports, not exports. Most Costa Rican exports leave through the country’s Atlantic and Pacific ports or by air. The imports most exposed to the slowdown are yellow corn, soy and wheat, used in animal feed and in flour and bread.

Costa Rica imported about 1.13 million metric tons of yellow corn in 2025, mainly from the United States, according to export promotion agency Procomer. It also imported more than 277,000 metric tons of soy, mostly from the United States, and about 278,000 metric tons of rice, mostly from Brazil.

Rodney Salazar, president of the Costa Rican Chamber of Foreign Trade (Crecex), said bulk grain shipped from U.S. Gulf and Atlantic ports to Caldera, the country’s main grain terminal, faces the greatest exposure. If restrictions persist, he said, longer transit times, higher transport costs and rescheduled shipments are likelier than empty shelves.

Who Pays When Routes Stretch

Erick Ulate, executive director of the Free Consumers Association (ACL), said import prices are negotiated in advance, so major short-term price increases aren't expected. If the situation continues or worsens, he said, higher freight costs could reach consumers, especially for foods already affected by El Niño.

Foreign-trade specialist Óscar Álvarez said reduced transits mainly affect imports of fuel, grains, fertilizer, containers, vehicles and raw materials. Consumers could face tighter supplies and higher prices, particularly for fuel, food and goods from Asia.

Helmut Dorsam, president of the Costa Rican Shipping Chamber (NAVE), said Asian imports would take the hardest hit. A ship from Asia bound for Limón through the canal might instead try to reach Caldera or skip port calls, he said. Some cargo might need transshipment at additional cost, while importers would likely increase safety stocks, also raising costs.

Jaime Morales, senior manager of global trade at EY, said people couldn’t yet claim a widespread impact. He advised companies to monitor daily transits, authorized ship drafts and any new water-conservation measures. Logistics companies’ willingness to pay more to reduce risk could make added costs, rather than shortages of specific products, the more visible effect, he said.

Routes Around the Canal

Alternative routes exist, but they don't make the supply chain independent of shipping costs. Much Asian cargo can enter directly through Puerto Caldera on the Pacific without using the canal. Goods from Europe or the U.S. East Coast can arrive through Limón-Moín on the Caribbean.

Other shipments can be transshipped in Panama and trucked into Costa Rica through the Paso Canoas border crossing. Rainfall will determine how long the squeeze lasts. Costa Rica’s National Meteorological Institute (IMN) expects El Niño to reach peak intensity between November and January as the dry season begins.

Salazar recommended close monitoring of grain and animal-feed supply chains and said it was premature to describe a general supply risk. For now, specialists describe the threat as less a suddenly empty shelf than the quiet passage of higher freight costs into prices paid by consumers. The IMN expects El Niño to peak between November and January.