The COVID-19 pandemic has had a devastating effect on the lobster industry. Demand has dropped in major markets, partly because restaurants have closed their doors, and overall demand is down because of COVID-triggered recession. As a result, prices have fallen significantly in all markets. There is no immediate relief in sight.

Supplies

The Australian lobster industry was hit by COVID-19 when China shut down imports. Consequently, a large part of Australia’s market disappeared. However, China is now slowly opening up again, and in order to help the lobster industry benefit from this and recoup their losses earlier in the year the Australian lobster fishery will open two weeks earlier than usual. Prices are still lower than before the pandemic, though.

In Western Australia, lobstermen have experienced a surge in landings, but a decline in prices. Since the beginning of the COVID-19 pandemic, prices for Western Australian rock lobsters have dropped significantly. In May 2020, export prices were down by 19 percent compared to the same time in 2019. There are several reasons for the price declines, among them the difficulty of finding air transport capacity. In addition, there has been an increase in supplies of rock lobster from New Zealand and Tasmania. Also, the closure of many restaurants in Hong Kong SAR and other large

Chinese cities have put a damper on demand. Most of China’s imports of lobster are live, transported by air. The scarcity of flights have made this trade more difficult. Indonesia has the potential to increase its production of spiny lobster significantly. However, present legislation prohibits the catch of lobster juveniles and their use for aquaculture. Instead, a lot of juveniles are caught illegally and shipped to Viet Nam, where they are on-grown to marketable size. It is estimated that if juveniles were to be legally caught for aquaculture in Indonesia, annual production of market-size spiny lobsters could be increased by some 12 500 tonnes.

The main season for Maine lobsters runs from July through November. In Canada, the season closes earlier, so to some extent the two countries complement each other. In 2020, the summer lobster harvest has been so-so in Canada and New England. The largest volumes put some pressure on  prices. The spring lobster season in Prince Edward Island was marked by labour shortages at the processing plants as a result of COVID-19. Then, landings became good, and created a glut in the market, pushing prices down.

International trade

During the first 6 months of 2020 there was a serious decline in world lobster trade. Global exports dropped by 24.4 percent, to 63 402 tonnes. US exports declined massively by 44.6 percent to just 4 583 tonnes, while Canada suffered a 17.8 percent drop to 40 092 tonnes. On the import side, China imported 18.4 percent less (18 596 tonnes) compared to the first six months of 2019. The largest importer, the United States of America, imported 24 326 tonnes or 11.5 percent less than during the same period in 2019.

Just over 90 percent of US lobster imports come from Canada, and imports during the first 6 months of 2020 amounted to 22 075 tonnes or 11.7 percent less than during the same period in 2019. China’s imports of lobster also dropped, and all main suppliers registered a decline. Imports from Canada went from 11 595 tonnes in the first half of 2019, to 8 579 tonnes in the same period in 2020 (-26.0 percent). The European Union registered a 22.2 percent drop in lobster imports during this period, with total imports amounting to 10 625 tonnes. Canada has been the main benefactor of the Maine lobster industry’s troubles. But the US administration has now achieved a few breakthroughs that may change the balance in favour of the United States of America. Recently, the United States of America signed an agreement with China removing the 35 percent tariff that gave Canadian lobster a competitive advantage in the Chinese market.

The United States of Americas has also signed a deal with the European Union that removes the tariff on US lobsters. Irish lobster catchers are upset about this deal. The Irish lobster industry has been hit by the effects of the COVID-19 pandemic, which has put a damper on demand because of economic decline, and prices have dropped by 20 to 30 percent so far. The COVID-19 prompted recession is expected to push consumers away from high-priced products like lobster and over to cheaper crustaceans like shrimp and crayfish.

Prices

The outlook for the rest of 2020 is very uncertain. While demand seems to pick up somewhat in some Lobster prices in Viet Nam have dropped significantly as a result of the COVID-19 pandemic. Exports slowed down when China closed its borders, and after the country re-opened to some extent, inspections have been very strict, and market demand is still weak.

In Viet Nam, lobsters are farmed mainly in the central provinces, and the main market has been China. But as the pandemic set in, shipments to China were severely reduced. Lobster farmers then  lowered prices on the domestic market to sell more here. But at the moment, prices are so low that farmers are losing money.

Lately, there have been several storms hitting the southern United States of America. Storms in Florida will probably impact the price of spiny lobsters from this region, as catches will decline. But prices are extremely volatile, and have ranged from USD 4.00 to USD 8.59 per lb. In 2019, the average beach price for spiny lobsters in Florida was USD 7.80 per lb. So far in 2020, the average price is USD 7.62 per lb, in spite of the fact that landings dropped from 1 867 tonnes to just 281 tonnes.

Outlook

The outlook for the lobster market is bleak everywhere. It may become worse as more economies get into trouble. Luxury items like lobster are usually hard-hit during periods of economic downturn, and many expect that the world economy will further contract, and for a considerable period of time.

Thus, trade will be reduced, and prices will continue to be low, or fall even lower. Also, supplies may go down because fishers do not find it worthwhile because of the low prices.