Improved market access to China and the EU28 for Canada, and increasing interest in Australian rock lobster in China, means tougher competition for US exporters. In addition, landings of North American lobster have been low during the start of the 2018/2019 season.

Water temperatures on the Canadian east coast in Nova Scotia were lower than normal at the beginning of the season, which started on the last Monday of November. The lobsters are hiding under rocks and staying away from the traps. This resulted in 25–50 percent lower catches during the first few weeks of the season. Consequently, supplies have been very tight and prices soared. According to observers, it may get worse as the cold winter sets in and water temperatures sink further.

The lobster industry in Western Australia is in uproar over a move by the Western Australia Government, which in early December announced that the Government would nationalize part of the Western Australian rock lobster fishery by taking a 1?385 tonne quota for itself. At the same time, it was announced that the total quota for this fishery would be progressively increased from 6?300 tonnes to 8?000 tonnes. The quota to be held by the government amounts to about 17 percent of the total fishery.

In South Africa, there is also fighting over rock lobster, but for a different reason. World Wide Fund for Nature (WWF) went to court to save the rock lobster resource for the future as the organization felt the TAC of 1?924 tonnes set by the Department of Agriculture, Forestry and Fisheries (DAFF) was too high. The court decided in favour of WWF and agreed that the TAC should be lowered to just 790 tonnes. DAFF is now considering an appeal to the court ruling.

International trade

World imports of lobster during the first nine months of 2018 declined by 9.4 percent to 119?100 tonnes. The biggest importer was the United States of America, which at 43?500 tonnes accounted for 36.5 percent of the total imports.

Canada is benefitting from the trade war between the United States of America and China. Since US lobsters were made subject to a 25 percent import tariff on 6 July 2018, Canada’s lobster exports to China have increased noticeably. During the review period, Canada was the largest exporter, accounting for 65?300 tonnes or 49.2 percent of the total compared to 62?400 tonnes during the same period in 2017 (+4.6 percent). US exports of lobsters increased by 15.5 percent to 35?000 tonnes.

During the first nine months of 2018, China’s lobster imports (all types) increased by 51 percent, to 12?100 tonnes. Both Canada and the United States of America saw healthy increases in their exports to China, both by 43 percent compared to the same period in 2017. But Canada ships almost twice as much as the United States of America.

Australian rock lobster exporters were eagerly anticipating zero import tariffs in China starting on 1 January 2019, as part of the two countries’ free trade agreement, which went into force in December 2015. EU28 tariffs on Canadian lobsters have also been lowered. As part of the Comprehensive Economic and Trade Agreement, which came into force in December 2018), the 8 percent tariff on Canadian lobsters was discontinued, giving Canada an advantage over US lobsters also in Europe.

Prices

Demand for rock lobsters in China is high and rising, and so are prices. In restaurants in Guangzhou and Shanghai, prices have reached USD 230 per kg (or USD 11.50 per 50 g). New Zealand also exports rock lobsters to China, and export prices from New Zealand to China in 2018 were at about USD 85 per kg, but higher prices have also been reported. The tight supply of lobsters in Canada during the start of the season pushed prices up substantially. Fishers reported first-hand prices as high as CAD 8.00 (USD 5.99) per lb in mid-December, while just a week earlier the price was CAD 6.50–7.50 per lb.

Outlook

Supplies of North American lobster may be very tight in the next few months due to colder than normal sea temperatures on the Canadian east coast. Landings at the beginning of the season were down, and may continue to be low during the first months of the year. Prices for North American lobsters will therefore be high at the beginning of the year, especially in preparation of Chinese New Year. Valentine’s Day (14 February) is another big day for lobster sales. China will continue to demand more lobsters, both North American and rock lobsters. This significant growth in demand is pushing prices up on all fronts.