The report analyses the market situation until September 2017 

The Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU28, which went into effect in late 2017, will have a negative effect on US exports of lobster to Europe. US exporters will lose market share, and prices will be lower.

Supplies

Very good catches were recorded during the opening of the Canadian lobster season in lobster fishing areas 33 and 34 in December 2017, and prices were also good. The opening price was set at CAD 5.75 per pound (USD 4.47) compared to about CAD 5.50 per pound last year. Bad weather including strong winds caused a one-day delay of the opening of the season in these areas. The delay did not seem to worry fishers, though. The lobster season in this region runs until May 2018.

International trade

Total world imports of fresh or live lobster during the first nine months on 2017 fell by 4.8 percent compared to the same period in 2016. The United States of America imported about the same amount (20 800 tonnes), while China increased its lobster imports by almost 15 percent to 15 600 tonnes. Canadian imports fell from 18 600 tonnes to 13 700 tonnes (-26.4 percent).

World imports of frozen lobster declined marginally (-1.3 percent) to 34 500 tonnes during the first nine months of 2017. The largest importer was by far the United States of America, also accounting for most of that minor decline.

The New York Times claimed that the Trump administration’s trade policies are benefitting Canadian exporters rather than US exporters. The CETA agreement between Canada and the EU28, which gives zero duty access to the lucrative EU28 market, results in an 8 percent tariff advantage over the United States of America. However, US exports reduction to the EU28 cannot yet be blamed on CETA. US lobster exports to several countries, including European countries, have been falling for some time. For example, US lobster exports to France fell by 36 percent to USD 27 million in 2016 compared to 2015, and during the first nine months of 2017, US lobster exports to France fell a further 15.7 percent to USD 12.6 million.

Canadian lobster is popular in China, and the Chinese ambassador to Canada, Lu Shaye, is reported to be pushing for direct flights between Halifax and China in order to facilitate Canadian live lobster exports to China. US lobster exporters are fully aware of this development and they appreciate the importance of maintaining good trade relations between the United States of America and China. With the growth of the Chinese middle class, demand for lobster in China is increasing, and Chinese lobster imports from the United States of America are also growing.

Prices

The Maine lobster industry is suffering from low yields and low prices (which are now rising slightly). Prices to the fishers in January 2018 were at about USD 4.00 per pound. Although this was an improvement on prices earlier in the year, it was still 30 percent below price levels at the same time in 2016. Competition from Canada is strong, and it was therefore not expected that prices for Maine lobster would increase much.

Prices for lobster tails in the United States of America have been relatively flat, but with a slim indication of an increase since the end of 2016. Wholesale domestic prices for American lobster dropped dramatically during the summer of 2017, but have since had a minor recovery.