(PANAMA CITY) Panama's ports expect shipping container volumes to grow by a fifth this year despite a slowing US economy as Chinese trade surges, the head of the country's top maritime body said on Wednesday.
Fernando Solorzano told Reuters that he expects the country's principal ports to handle up to five million 20-foot equivalent units (TEUs) - the size of a standard shipping container - in 2008.
In 2007, Panamanian ports handled just under 4.1 million TEUs, up from 2.7 million TEUs in 2006, thanks in part to increased trans-shipping through the Pacific port of Balboa on the mouth of the Panama canal. Balboa is run by a subsidiary of Hong Kong's Hutchison Whampoa.
Despite a slowdown in US consumer demand and the possible drop in trade between China and the US Eastern seaboard, Mr Solorzano said that the fundamentals are in place for continued growth in Panama's shipping sector.
'If everything goes well and continues as it has been, I believe we can reach this goal (of five million TEUs),' he said.
Rising imports such as cars and consumer goods to China are expected to offset the slowing US economy at Panama's ports.
Partly as a result, Mr Solorzano said, there is still enough business for the construction of another Pacific mega-port to be feasible.
Despite billions of dollars in investment in recent years, Panama still lacks the port infrastructure to handle the huge mineral imports from Latin America that China needs to fuel its economic growth.
He said that China's largest shipping conglomerate, China Ocean Shipping Co, was still interested in establishing a new billion-dollar port that could be located at the Pacific entrance of the Panama canal, not far from Balboa.
Panama had planned to auction the rights to operate the port but is reassessing the project after a number of firms, including Danish shipping and oil group AP Moeller-Maersk, dropped out of the running.
Mr Solorzano said that the government would soon make a decision on how to move forward with the project, which could now be awarded by a direct contract and not via a tender process. -- Reuters