Global supply chains could be slowed this year by restricted shipping through the Panama Canal, according to forecasts for extended drought in the region triggered by a “Super El Nino” weather shift in the Pacific Ocean, analysts say.
El Nino weather cycles are marked by higher-than-average sea surface temperatures in equatorial Pacific waters, which typically leads to changes in weather patterns around the globe, according to supply chain risk analysis firm Everstream Analytics.
While such cycles alternate regularly with corresponding “La Nina” events of colder-than-usual waters, this year’s trend is more extreme, the firm said in a webcast.
“This is one of the biggest meteorology events we’ve seen many, many decades,” Everstream Analytics’ chief meteorologist Jon Davis said in the video webcast. “And it is going to have major ramifications in supply chains as we go through the remainder of this year.”
“We’ve been in an El Nino event for basically a month, and it looks like it will strengthen to a major or a super El Nino event as we move through the summer and through the end of the year,” he said.
If that happens as expected, Everstream Analytics is predicting serious impacts on global supply chains, as occurred during the past three super El Ninos that happened over the past four decades, in the years of 1982, 1997, and 2015.
For the 2026 version, the firm is forecasting increased rainfall across North America and South America, bracketing increased dryness in Central America and Panama. Extended droughts in that region typically draw down the water levels in Lake Gatun, the crucial feeder to the Panama Canal. In the past, that has forced canal authorities to restrict the number of vessel crossings per day and to allow only ships with shallower drafts.
Meanwhile, the event could also lead to drought in India and Southeast Asia, which could harm industrial manufacturing, agriculture, food & beverage products, and transportation networks, the firm said. It could also raise the risk of major storms striking the area, with possible impacts on important industrial centers in China, Korea, Japan, Taiwan, Hong Kong, and Vietnam.
