(Bloomberg) -- The Panama Canal saw a jump in cargo as China and the U.S. eased trade restrictions, opening up the market for grains, pork and liquefied natural gas, canal administrator Ricaurte Vasquez said during a press conference on Thursday.
The canal saw a record 516 million tons of cargo pass through its locks in fiscal year 2021, which ended last month, an 8% jump on the previous year. Revenue for transits totaled $3.9 billion in fiscal year 2021 and the canal authority projects that to increase to $4.2 billion in the 2022 fiscal year, which began this month.
Grain shipments from the U.S. to the Asia jumped as the U.S. eased some trade restrictions with China, and China's pig herd stayed relatively healthy, boosting demand for animal feed, Vasquez said. Higher rainfall and improved water management in Panama meant the canal could offer a full draft to ships all year, allowing them to load more cargo onto larger vessels.
A harsh winter in the northern hemisphere led to higher demand for heating, causing shipments of liquefied natural gas to spike. LNG shipments from the U.S. to Asia through the canal rose 31% in 2021, he said.
The canal is planning to invest $16 billion over the rest of the decade in infrastructure improvements, technology upgrades and land purchases for reforesting, Vasquez said.
The authority is in talks with the shipping industry to establish a new toll system that will center around water availability, ship capacity and peak demand times. The canal plans to eventually implement a pricing system that punishes ships that don't have zero or near-zero carbon emissions, he said.
Congestion at shipping ports in the U.S. could benefit the canal in 2022 should companies eye the canal as an alternative route for getting their goods to market, according to Vasquez.
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