Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account – Julia Horowitz contributed to this report. And in northern Italy, farmers are muddling through the worst drought in 70 years, affecting the production of crops from soya to parmesan. High river water temperatures in France have impeded the operation of some nuclear power plants. The source of London’s iconic Thames River has dried up and moved roughly five miles downstream. Large parts of Europe have been suffering extreme heat waves and drought. Researchers at the Kiel Institute for the World Economy have previously found that in a month of low water, the country’s industrial output can fall by about 1%.Ĭurrently, the German shipping authority is not imposing restrictions on Rhine traffic due to low water levels.īut a spokesperson for the waterways agency said that in some instances, commercial shipping may not be viable if freight had to be reduced too significantly. Germany’s hugely important manufacturing sector could take a bigger hit. Germany to fire up coal stations as Russia squeezes gas supply The drought could exacerbate an even bigger crisis for Europe’s biggest economy, which is already facing the risk of a recession because of an energy crisis, high inflation and supply chain bottlenecks.Ĭhimneys and a cooling tower emit vapor at the Scholven coal-fired power plant, operated by Uniper SE, beyond housing in Gelsenkirchen, Germany, on Saturday, May 21, 2022. “There is also an increased levy in Germany to pay for cargo when water levels drop below a certain level,” UBS insurance analysts warned. “Therefore, transport becomes more expensive.”įor instance, in the Kaub gauge, water levels below 75 centimeters (29.5 inches) usually mean that a large container ship “has to reduce its upload to about 30%,” the economists said. The situation is reminiscent of 2018, when similar problems with the river led to a “standstill of freight shipping” and reduced German economic growth by an estimated 0.2%, according to Deutsche Bank economists.Īlthough water levels this year haven’t fallen to the same extent yet, “cargo ships already have to reduce the loading quantity,” they wrote in a report last week.
Now, water levels are expected to fall even further before rising “very slightly” in the coming weeks, the Rhine Waterways and Shipping Authority said Friday. The agency said that had created “frequent obstructions” for ships. Last month, Germany’s Federal Institute of Hydrology warned that water flows at the Kaub gauge, located to the west of Frankfurt, were already at just 45% of average levels for this time of year. Water in the river has dropped to “exceptionally low” levels in some areas, disrupting shipping on the country’s most important inland waterway, German officials told CNN on Friday.Ī lack of rainfall in recent months means that cargo ships are now carrying lighter loads, transport costs are soaring, and economic and power supply risks are worsening. Germany’s Rhine river is getting too dry, snarling supply chains and creating more problems for its struggling economy.
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