2020 was a turbulent year, fundamentally defined by COVID-19. In the lobster industry, trade patterns changed, and market positions have been altered. As the world moved into 2021, there was still much turbulence relating to possible trade policies by the United States of America, uncertainty regarding the development of trade conflicts, and great uncertainty about the effects of Brexit on trade in Europe. In any case, prices are expected to continue to decline.

Supplies

The conflict between lobstermen and environmental groups continues in New England. Authorities in the state of Massachusetts have proposed a complete ban on lobster fishing in all state waters between February and May 2021 in order to protect the threatened Right Whale (Eubalaena glacialis) population. The whales are in danger of becoming entangled in the trap ropes. Various environmental organizations have called for federal action, but apparently with limited success. According to the latest estimates, only 356 right whales remain, while dozens of deaths were claimed in recent years because of entanglement-related causes.

Bad weather conditions caused the lobster season in Nova Scotia to be split. While the northern areas were able to open the fishery on 30 November 2020 as planned, winds were so strong in the south that it was not considered safe to start the season at that time.

RECENT NEWS

A company in North Queensland, Australia, announced that it produced its first lobster juveniles in its hatchery last Christmas 2020. The technology is based on research undertaken by the University of Tasmania and the project is reportedly the first to breed tropical rock lobsters for commercial aquaculture.

International trade

Global trade with lobsters during the first nine months of 2020 declined by some 15 – 20 percent.
Imports into the United States of America dropped by 11.9 percent, to 36 298 tonnes, while Chinese imports were more or less stable at 33 828 tonnes. European Union imports declined by 15.5 percent to 21 429 tonnes. The main reason for this was that restaurants had to close down because of the COVID-19 pandemic, and this is the main distribution channel for lobsters in most markets.

US exports of lobsters dropped by as much as 26.9 percent during this period, to 18 256 tonnes. The United States of America registered declines in shipments to most markets, and Canadian lobster exports declined by 14.6 percent to 64 236 tonnes during the first nine months of 2020.

RECENT NEWS

A Singapore-based company is taking it one step further by introducing so-called “cell-based” lobster meat, i.e. artificial lobster meat. The company is active in the “alternative protein” industry and has already produced artificial meat and various shrimp-tasting products. The lobster products they now offer include terrine of Shiok lobster and lobster gazpacho.

RECENT NEWS

In late November, Canada and the United Kingdom of Great Britain and Northern Ireland reached a transitional trade deal. As the United Kingdom of Great Britain and Northern Ireland left the European Union, it also exited all European Union trade deals with other countries and therefore has to establish new bilateral trade agreements with a number of countries such as Canada. The United Kingdom of Great Britain and Northern Ireland is Canada’s fifth largest seafood market, with an export value of about USD 131 million per year, mostly comprising salmon, lobsters, scallops and shrimp. Without this transitional trade deal, Canadian exports would have been subject to an average tariff rate of about 10 percent.

However, the Canadian lobster industry is still one step ahead, as it is set to retain its Marine Stewardship Council (MSC) certification for another five years for all five Canadian lobster fisheries.
Meanwhile, the US lobster fishery has lost its MSC certification, and will have to work hard to regain it.

In October 2020, Australian seafood exports became the victims of a stricter inspection policy by Chinese authorities. Several consignments of live rock lobster were stopped at Chinese airports for inspection and quarantine as a measure to fight the COVID-19 pandemic on the part of Chinese authorities. However, some observers are speculating that this tightening of regulations may also be the result of a deterioration in China-Australia relations after Australia criticized China’s initial handling of the COVID-19 crisis. Declines in shipments were recorded for 2020. According to Chinese customs, China imported 5 080 tonnes of live rock lobsters from Australia during the first nine months of 2020, down 25 percent by volume and 33 percent by value compared to the same period in 2019. The trade volume picked up again in August and September, but prices dropped.

As a result of lower exports of lobster to China, some quantities of rock lobster remained in Australia and were diverted to the domestic market at low prices. Fortunately, the quantities have been rather low in comparison to the total rock lobster industry. So far, only about 35 tonnes have been put on the domestic market, while the fishery lands about 6 500 tonnes of lobster a year.

Prices

As a result of the drop in exports to China, prices for Australian rock lobsters have fallen significantly.
Prices hit an all-time low at the end of the year, and this also affected prices on the domestic market.
Export prices for live rock lobsters from Australia dropped to USD 52 to USD 74 per kg, while prices on the domestic market were as low as AUD 30 (USD 22) to AUD 50 (USD 38) per kg.

Prices for Canadian lobster (Homarus spp), on the other hand, remained strong at the beginning of the season. Bad weather in the southern regions of Nova Scotia had limited supplies as the start of the season was delayed, and this has contributed to keeping prices high. However, as the fishery opens, supplies will pick up and prices are expected to decline somewhat. There is considerable uncertainty about demand and sales in Asia prior to Chinese New Year, which is usually a high season for lobster sales in China and other Asian markets. If the “second wave” of the COVID-19 pandemic remains strong, Chinese imports may be limited.

Outlook

The lobster industry is longing for a return to normality. When the COVID-19 pandemic comes under control, it is hoped that normality will return. But one wonders.

Trade patterns have changed because of the pandemic, as the China market, in particular, partly closed down. In addition, the effects of the US-China trade conflict and several important new trade agreements will leave their mark on trade for some time to come.

Prices are high for Homarus lobster but will certainly decline if the economic effects of COVID-19 become more pronounced. Sales through the restaurant sector will probably not recover quickly, as the sector is very hard hit by the pandemic, and many restaurants are in danger of going out of business. Rock lobster prices are already low and will stay low until “normal” trade with China
resumes.

The outlook is therefore one of continued uncertainty.