Peru’s huge port of Chancay, which authorities hope will become a major shipping hub for trade between South America and Asia, will dispatch two container ships a week from the end of next month.
A jump in container traffic through Chinese ports
After the opening of the port in mid-November, Chancay will initially cover a direct route to Shanghai and may then connect to other parts of the Asian market, depending on demand.
At the end of November, the stage known as “test conditioning” will begin, which is expected to last until May. However, during this soft start phase they can already handle real cargo, with two direct ships per week.
The cabotage routes will open with smaller ships from Colombia, Ecuador and Chile, whose cargo will later be shipped to Asia from Chancay, initially in ships carrying up to 14,000 containers, which will then gradually increase to larger ships that hold up to 24,000 containers.
Cosco Shipping Ports owns and will operate the port with a 60% stake, with the remaining 40% held by Peruvian mining company Volcan, which is controlled by Glencore.
The benefits for Peru’s economy
In a study conducted by the Center for China and Asia-Pacific Studies at the University of the Pacific in Lima (“Sharing Chinese and Peruvian Visions about the Future Chancay Port: Exploring Opportunities under the Belt and Road“), four “economic corridors” were identified in hinterland of Peru that can be connected to the port of Chancay and its relatively easy access to Asian markets via the Pacific Ocean. However, not everyone currently has the infrastructure to take advantage of the new opportunity.
The northern coast corridor, for example, already includes companies exporting more than $100 million worth of coffee and other agricultural products through the smaller port of Callao near Lima. The road of this corridor to Chancay is in good condition.
Instead, the corridor that would connect the port to the city of Pucallpa in the Amazon rainforest on the border with Brazil is home to smaller export companies specializing in coffee, cocoa and timber and one of Peru’s most rudimentary road networks. To take advantage of the new port, each corridor needs its own regional strategy and policies for infrastructure improvements and business support.
Other sectors such as Amazonian bio-foods, forestry and fisheries can benefit from the access to Asian markets that the Chancay port will offer. However, they face greater challenges as they have fewer companies with the ability to integrate internationally. For the Ucayali department government and the National Association of Industries, the Chancay port will increase demand for the production of high-value products from the Amazon, such as fruit and timber. Therefore, economic policies should promote the arrival of investments in the tropical forest areas, the study concludes, with all the risks that such a development trajectory poses to the precious lung of our planet, the Amazon.
