In 2007, the Panama Canal Authority (ACP) started work on its $5.25 billion expansion project, which will change world trade patterns and open the waterway to new markets.The expansion will double canal capacity by 2014 and allow for the transit of larger and wider vessels...
Last year, the Republic of Panama’s gross domestic product grew by 10.5 percent and unemployment is at the lowest levels ever experienced, at 3.5 percent. The execution of the project has drawn the interest of the international community, and has put Panama on the map in a way never imagined during the project’s conceptual stage...
Ports in the East and Gulf Coast of the US are making every effort to upgrade their infrastructure to meet the demand of post-Panamax vessels.
The Panama Canal expansion impact will be felt in several market segments. Grain, the second most important commodity to go through the waterway, will also benefit, as the expansion will facilitate the flow of grains originating in the Midwest of the US.
Other South American commodities that could be shipped in larger volumes through the expanded canal are coal and iron ore originating from Colombia and Venezuela, with destinations in Asia.
However, the greatest potential for LNG through the canal depends on the developments of shale gas in the US and Canada; particularly, if shale gas is exported from the East Coast of the United States to Asia. We have been following very closely the developments in terms of permits, production and liquefaction plants location and are inclined to believe that the first LNG exports from the US may coincide with the completion date of the Panama Canal expansion in 2014.
The Republic of Panama is rapidly positioning itself as the transportation and logistics hub of the Americas...Only 80 kilometers separate the Atlantic and Pacific oceans in Panama, and connectivity is available by water, land and air. Panama’s dollarized economy, the Colon Free Zone, its strong banking system, the availability of warehousing space and third party logisitcs, and the special tax and migratory incentives available to multinational companies doing business abroad, all compose a cluster of value-added activities that are making of Panama the best place to consolidate cargo in the Americas

How significant is the expansion going to be on the price of various commodities globally?

How competitive is the US shale market in regard to export potential, and is the current depression in oil prices a key factor, and/or can the panama canal expansion itself play a key role in effecting the international price of oil and gas?

Will the opening of the expanded panama canal have clear winners and losers geo-politically i.e. the Americans vs the russians ?