Suez Canal revenues continued their downward trend in September, with US$448.8 million in tolls collected compared to US$469.8 million in the same month last year.
This is the eighth month in a row revenues have fallen year-on-year, according to figures released on Monday by the Suez Canal Authority. As of the end of September 2015, total canal revenue for 2015 amounted to US$3.88 billion, compared to US$4.09 billion in September 2014.
The drop in revenue comes despite Egypt’s massive investment in a canal expansion project known locally as the New Suez Canal. Officially launched in August, the new extension — which involved digging a new 35-km-long lane and improving an additional 37 km of existing shipping lanes — was built with LE64 billion raised by selling bonds to the public, plus at least US$850 million worth of bank loans.
Egyptian officials claim the project will more than double canal revenue, bringing it from US$5.5 billion in 2014 to US$13.5 billion by 2023.
But industry experts and financial analysts have disputed those projections since the project was announced, noting that the number of ships passing through the canal varies depending on global trade patterns. One firm, Capital Economics, calculated that global trade would have to expand by 9 percent a year for Suez Canal income to rise in line with government expectation, while Moody’s credit rating agency put that figure at 10 percent a year.
Global trade only grew by an average of 5 percent a year over the last 20 years, according to the World Trade Organization (WTO).
With the global economy suppressed by falling demand for imports in China, Brazil and other economies, as well as lower prices for oil and other commodities, the WTO predicts the coming years will fall well below average.
At the end of September, the WTO slashed its world trade growth forecast for 2015 to 2.8 percent, down from the 3.3 percent it predicted in April. It also reduced its 2016 estimate to 3.9 percent, compared to the 4 percent it had predicted earlier.
Last week, the global shipping firm Maersk — considered a bellwether for the container shipping trade — lowered its profit forecast for 2015. The company cited a “deteriorated market” for shipping, and said it does not expect the market to recover this year.