The report analyses the market situation during the first quarter 2017

Demand for lobsters is growing, particularly in China. European demand is also good. Canadian exports to the EU may gain a trade advantage over US exporters when the Canadian Free Trade Agreement (CFTA) comes into effect.  

Supplies

Prospects are good for the 2017 Maine lobster season, according to IntraFish. Last year was a record year, 59 000 tonnes landed, up from 55 500 tonnes in 2015. Landings had been declining for three years, but bounced back in 2016, and observers now expect another very good year. The value of Maine lobster landings amounted to US$533.1 million, up from US$501.3 million in 2015. The growth in value also reflects increasing prices. First-hand prices for lobsters increased from US$2.69 per lb in 2012 to US$2.90 in 2013, then jumped to US$3.70 in 2014, peaked at US$4.09 per lb in 2015 and fell slightly back to US$4.07 per lb in 2016.

This development reflects growing demand, both domestically and internationally. The US market is strong during the summer months. But it is the Chinese market that has had the greatest impact. In 2012, Maine lobster exporters sold no lobsters to China, but in 2016, 4 500 tonnes were shipped to China. In total, 11 300 tonnes of lobsters were exported to foreign markets from Maine. China, as well as the rest of Asia, is now seen as the most promising market for Maine lobster, although there is also good demand in Europe.

The spring lobster season in Prince Edward Island started at the end of April, and industry spokespersons were optimistic about the outlook. The fishers were hoping for a strong season and that prices would stay at least at last year’s high levels (US$6.50-6.75) per lb (Undercurrent News).

Prince Edward Island (PEI) lobster fishers are concerned that Canadian lobster rules are changing too fast. Recently, it was announced that in fishing area 25, the minimum carapace length was changed from 72 to 77 mm. This is of concern especially in PEI because the lobster industry there has developed a market for smaller lobsters, which are called “canners” (Undercurrent News).

International trade

The Canada Free Trade Agreement (CETA) between Canada and the EU is a cause of some concern for US lobster exporters. Canadian exporters will not have to pay any EU import duty on Canadian lobsters when the agreement comes into effect, while the United States of America has no such free trade agreement with the EU. The agreement will save EU consumers about EUR1.00 per lb, and thus put Canadian lobsters in a very competitive position. The EU market constitutes about 15-20 percent of US lobster exports, and is a US$200 million industry. US and Canadian lobster exporters focus on different parts of the European market. Canada focuses mainly on the northern European countries, while the United States of America focuses on southern European countries such as Spain, Italy and Greece, where prices tend to be lower than in the north. Hence, when the CETA is in effect, Canadian lobster will be in a better position to also compete in southern Europe (Undercurrent News).

China’s appetite for lobsters is growing. Imports during the first quarter of the year increased from 5 800 tonnes in 2016 to 6 700 tonnes in 2017 (+15.5 percent). There was an increase in particular in the category “live, fresh or chilled”.

Like the North American lobster exporters, tropical lobster exporters are looking to China for new business. Bahamas lobster exporters are hoping to receive approval for exports of live lobsters to China before Christmas. In China, live lobsters have long been the preferred product form, although recently they have also been buying cooked lobster. Bahamas’ total exports of lobsters annually amount to about US$55-80 million.

E-commerce is exploding in China, and lobster is one of the products that is offered and a number of suppliers are already active. It is expected that by 2020, 750 million Chinese will use the Internet to buy goods (Undercurrent News).

Global imports of fresh/live lobster took a dip during the first three months of the year compared to the same period in 2016. The total amounted to 18 800 tonnes, compared to 20 600 tonnes last year (-8.7 percent). The largest importers were the United States of America (6 900 tonnes), China (6 000 tonnes) and Hong Kong SAR (1 400 tonnes). US imports was responsible for practically all of the reduction in trade in this commodity.  Imports of frozen lobster, in contrast, have been slightly more stable, at around 7 100 to 8 700 tonnes during the first quarter of the year.

US lobster imports dropped by 17 percent during the first quarter of 2017 compared to the same period in 2016. The biggest reduction was for live/fresh/chilled. US exports of lobster during this period declined from 5 400 tonnes in 2016 to 5 100 tonnes this year.

Canadian exports of lobster dropped by almost 16 percent, from 17 100 tonnes during the first three months of 2016, to 14 400 tonnes during the first quarter of 2017.

EU imports of lobster were relatively stable at around 5 000 tonnes during the first three months of 2017. 0ver the past five years, this figure has fluctuated between 4 800 tonnes and 5 100 tonnes. 

Prices

The cold weather in the US north-east caused a shortage of lobster in the spring months, and consequently sent prices soaring. Although supplies are still at a low level, prices have begun to soften after Easter. Demand often weakens after Easter, and that has also been the case this year.

Prices for lobster tails on the US market continue to be very stable. For whole lobster, in contrast, prices greatly increased at the end of last year, but have since then dropped noticeably, and are now down to the level of March 2015. However, the trend seems to indicate the prices are edging upwards, albeit in leaps and bounds.

Prices for Western rock lobster from Australia have fallen recently due to weakening Chinese demand and cheaper US exports to China, according to ABC.net.au. Compared to six months ago, the first-hand price is down by 30 percent; competition from the US lobster industry is also playing a part in this. The US lobsters cost about one-third of that of Australian western rock lobster. The Australian rock lobster is marketed in China as a high-end seafood product (Undercurrent News).

European prices are more seasonal, with a peak around Christmas and a dip towards summer.