The opening phase of a global trade war seems set to have a major effect on the lobster market. Maine exporters have already lost market share in the EU28 and now they are hit by a 25 percent punitive tariff in China. This will surely affect US exports to that country. Consequently, there will be major changes in the structure of lobster international trade.

Supplies

Canadian lobster fishermen operating off the coast of Nova Scotia had a difficult time in May, with unfavourable weather conditions, strong winds and poor catches. Prices were also very low and many fishermen did not find it worthwhile to go out. Consequently, landings were poor.
In spite of weather problems in the Bahamas during the spring, the spiny lobster harvest was better than expected, according to the news service Tribune 242. Final figures are not yet out for the 2017–2018 season that closed on 1 April. The second season starts on 1 August and authorities have optimistic prospects.

International trade

Lobster exporters in Maine fear that US President Trump’s trade war will hurt their business. Consequently, a congressional delegation has asked the White House to keep lobster out of the battle with China over its trade practices. In 2017, Maine exported lobsters worth USD 128.6 million to China. China trade is particularly important to the Maine lobster industry after the EU28–Canada Comprehensive Economic and Trade Agreement went into effect and gave Canadian exporters advantages over their Maine competitors.

China announced in mid-June that it would impose a 25 percent punitive tariff on over 100 US seafood products, including Maine lobsters. This new tariff went into effect on 6 July, in response to the publication by the Office of the US Trade Representative of a list of 800 Chinese imports worth a total of about USD 50 billion, on which the United States of America started to impose a 25 percent tariff on 6 July. Thus, the Maine lobster industry will be hard hit again.

World imports of lobster amounted to 35 300 tonnes during the first three months of the year, 16.2 percent more than in the same period in 2017. The largest importers were the United States of America (+3.8 percent compared to first three months of 2017), Mainland China (+59.6 percent) and Hong Kong SAR (+19.0 percent).

The largest exporters were Canada with 15 400 tonnes, the United States of America (7 000 tonnes), and Australia (3 900 tonnes).

Lobster imports in the EU28 declined slightly during the first three months of 2018, from 6 231 tonnes in 2017 to 6 189 tonnes in 2018 (-0.7 percent). However, there was a substantial change in supplying countries. Imports from Canada increased by 63.5 percent, mainly due to the EU28–Canada Comprehensive Economic and Trade Agreement, whereas imports from the United States of America and the United Kingdom dropped by 38.4 and 10.0 percent, respectively.

Although the United States of America lost much of its market share in the EU28, total US exports of lobster were up by 30 percent during the first three months of 2018, amounting to 7 000 tonnes. Exports to China went up by 132.6 percent, but will most probably fall in the second half of the year due to punitive tariffs.

China imported 10 700 tonnes of lobster during the first three months of 2018, almost 60 percent more than in the same period of 2017 (6 700 tonnes).

Canada’s exports grew by 6.6 percent to 15 400 tonnes during the first quarter of 2018. However, this may change in the second half of the year if Canadian exporters are able to get enough product. Both the EU28 and China will want more lobsters from Canada.

Outlook

With the turbulence in international trade talks, and with Canadian lobsters entering the market in the course of the summer, Maine producers expect prices to fall. According to price data from Urner Barry, wholesale prices for Maine 1 ¼ lb lobster dropped from USD 10.78 per lb in April to USD 8.51 per lb in May.
Prices to Canadian fishermen also dropped significantly from April to May, from about CAD 13.00 (USD 10.10) per lb for whole, live hard-shell lobster to just CAD 7.00 (USD 5.50) per lb in the beginning of May. This is CAD 1.00 below the lowest price last year.

US President Trump’s trade war, now developing rapidly, seems to be hitting the lobster market hard. China is the second largest market for Maine lobster, and starting in 6 July a 25 percent punitive tariff is imposed on US lobster exports to China. Most likely, China will have to search elsewhere for lobster supplies. In the United States of America prices will probably drop, as the industry may have to focus on the domestic market.