International trade volumes declined in 2020, mostly because restaurants closed due to the COVID-19 pandemic. But China now appears to be recovering, demand is growing and during the last few months of 2020, Chinese lobster imports grew significantly.

Supplies

Canada’s Department of Fisheries and Oceans has announced that they will introduce a maximum catch size for lobsters in 2021 in Lobster Fishing Area 22 (LFA 22), including Magdalen Islands in the province of Quebec. The proposed maximum sizes range from 127-150 mm. About half of the lobster fishermen favour 145 mm as the maximum size. The purpose of imposing this maximum size is to increase production, as larger lobsters carry more eggs. The survival rate of larvae from larger spawners is also higher than for smaller spawners. New regulations to protect the right whales from getting entangled in lobster trap ropes have been proposed by the National Oceanic and Atmospheric Administration (NOAA), and the fishers are just becoming accustomed to the rules.

Environmental groups, however, are not happy with the rules and claim that they do not go far enough. Lobster fishers, on the other hand, complain that the new rules mean added cost for them. The National Marine Fisheries Service has estimated that about 2 500 lobster trap vessels would be affected by the new rules. All members of the Maine Congressional delegation in Washington DC have spoken out in favour of the fishermen’s situation by writing a letter directly to the White House and asking the US President to become involved in the matter. The senators and congressmen claim that the new rules may ultimately end Maine’s lobster fishery by 2030. Maine is the largest lobster producer in the United States of America, and accounts for about 80 percent of total landings, which are about 70 000 tonnes annually. Last year was a difficult year in most respects, also for the Maine lobster industry.

Recent figures show that the 2020 Maine lobster harvest fell by 5 percent compared to 2019, to 43 545 tonnes. And 2019 was by no means a top year. The catch in 2019 was 17 percent lower by volume than in 2018. Most of the blame for the 2020 development is placed on COVID-19. Export markets for US lobsters were collapsing, and the industry had to adjust fishing efforts as a mode to survive. For example, they had to change handling and packaging to accommodate the change from export markets to retail sales and e-commerce. This added cost to operations, which of course reduced profits.

Market

The Chinese lobster market, which has been so important for both US and Canadian lobster exporters, was slow during the first phases of the COVID-19 pandemic. Australian lobsters have fetched high prices on the Chinese market as US lobsters have been limited in supply and costly because of the 25 percent tariff imposed by China since 2018. Canadian lobsters were profiting from this situation, as were lobsters from Cuba. However, the tariff on US lobsters was eased a bit in January 2020, when the 25 percent tariff on US lobsters was lifted. Chinese purchases from the United States of America increased in the last months of 2020. As China lifted some of the restrictions on daily life, for example by opening up restaurants again, demand for lobsters increased. The United States of America exported lobsters worth USD 127 million in 2020, an increase of 49 percent compared to 2019. During the month of December 2020, US lobster exports to China amounted to USD 31 million, making it the biggest lobster sales to China in a single month since 2018.

US sales of lobsters to China were most likely helped by the fact that relations between China and Australia cooled off at the end of 2020, and Beijing imposed a ban on imports from Australia. The Australian rock lobster industry switched to selling lobsters on the domestic market, but as a result prices fell markedly, from about AUD 100 (USD 78) per kg to just AUD 30 (USD 23.40) per kg. Total Australian rock lobster exports in November and December 2020 dropped dramatically, while New Zealand took over much of China’s trade from Australia. Another incident that hurt Australian lobster exports to China was the re-entry of the United States of America on the Chinese market at the end of 2020. During the months of November and December, China imported 3 223 tonnes of fresh and live US lobsters worth USD 51.2 million, by far the largest shipments during a two-month period since 2018. North American lobsters are very popular in China, and as US lobsters were allowed back on the market, many importers switched to the Homarus species instead of the rock lobsters. Demand is good for live lobsters, and the re-entry of the US market will inevitably increase trade. While imports went up, prices fell by 5 percent, though. Global trade in lobsters declined during 2020. Total exports declined by 15.8 percent, to 166 432 tonnes. Australia was hardest hit of the top exporters, with a 27.6 percent decline. The United States of America and Canada also suffered declining numbers by 18.8 percent and 13.6 percent, respectively. Canadian exports declined to all the major markets. EU imports were down by 15.5 percent, to 21 429 tonnes during 2020 compared to 25 361 tonnes in 2019. However, Chinese imports of lobster went up by 5.4 percent in 2020 compared to 2019, to 48 367 tonnes, indicating that the Chinese market is recovering and returning to more normal conditions. While Canada saw a decline of 19.1 percent in shipments to China, the United States of America experienced a 267 percent increase in shipments, albeit from a very low base: from 1 752 tonnes in 2019 to 6 426 tonnes in 2020.

Price

Prices fell in all main markets such as Europe and North America. While EU imports of lobsters from Canada increased by 5 percent in 2020 compared to 2019, the value fell by 9 percent. But in the beginning of 2021, prices varied widely in North America. In February, Canadian lobstermen were paid CAD 12.00 per lb one day, and a few days later the prices jumped to CAD 15.00 per lb. The price swings in Canada were also felt in Maine, where similar price variations were experienced.

Outlook

It is now feared that the high prices could push down demand in North America and Europe. Part of the blame for high prices must be placed on lower landings, both in Canada and in Maine, during the first months of 2021. A return to “normal” would undoubtedly help the lobster industry. Lobster is a typical white tablecloth restaurant item, and those restaurants have been closed for long periods in most markets. Fortunately, it looks like China is returning to a more stable and normal state, and therefore lobster sales in China will probably come back up. In North America and Europe, it will take longer, no doubt, since the COVID-19 pandemic is far from over there. Prices will most likely stay relatively high in North America and Europe, but lower in Asia. Supplies are a bit tight, which pushes prices up.