Maine is sending far more lobsters to Canada as that country's exports to China boom
STATEWIDE (BDN) -- Canadians are snapping up live Maine lobsters, buying $43.72 million worth in July, more than double in that same month last year.
The increase comes at the same time that Maine’s live lobster sales to China plummeted. China imposed retaliatory 25 percent import trade tariffs against the United States on July 5.
As Maine’s exports to China dipped, Canada sold close to 58 percent more live lobster to China this July compared to July 2017. To handle the extra crustacean sales, Canadian airports are adding extra flights to Asia, according to the website Seafood Source.
But the tariffs instigated by the U.S.-China trade war tell only part of the story of the high export numbers, U.S. lobster sellers say.
While the tariffs had an immediate effect on many in Maine’s lobster industry, they say high prices, an early and robust soft-shell lobster season, and high demand for processed frozen lobster also are driving up exports of live lobsters. All Maine lobster exported to Canada is live. In Canada much of it is processed for the frozen lobster market and sold back to the United States.
“Things this year are different than last,” said John Norton, founder and president of distributor Cozy Harbor Seafood in Portland. “There was an earlier shed and stronger catch in June, July and August. So there was more lobster to be processed into frozen product this year than last.”
He said the volume of landings of new (soft) shell lobsters was up 18 percent this year over last among his suppliers. Canadian processing, he said, is up 10 percent compared to a year ago.
Norton said another factor boosting export numbers to Canada is higher prices.
“The onshore price this week is 25-35 cents per pound higher this year than last year,” he said. “That is primarily due to the strength of the frozen market.”
“That’s a 9 percent price increase to the shore even with tariffs in place right now,” he said.
Live lobster exports to Canada normally jump from June to July each year, then stay high through the end of the year. That’s because the height of Maine’s lobstering season is mid-summer, while Canada’s starts ramping up in late fall.
Exports of live lobster from Maine to Canada rose to $43.72 million in July 2018 from $327,458 in June, according to figures from WISERTrade, an international trade data firm. That compares to $19.14 million in July 2017, up from $629,632 in June 2017.
Norton also thinks Canadians are selling lobsters they usually put in cold water holding systems for up to three months while their season is closed. Hard-shell lobsters can live for up to three months in the tanks, whereas soft-shell lobsters don’t last in the tanks.
“So we were expecting a big bump in July,” he said. “Canada is ramping up to capture that market” left open by the higher U.S. prices quashing demand in China.
“The tariffs had an immediate effect,” Norton said. “You don’t want all your eggs in the China basket. The whole industry has been diversifying since July 5.”
Stephanie Nadeau, owner of The Lobster Co. in Arundel, came up short this year, as she was selling 30 percent to 35 percent of her live lobsters to China when the tariffs hit. Now orders are at a trickle. She’s actively trying to keep in touch with her Chinese contacts and expand her markets.
“Last week, I had three orders to China canceled,” she said. “I’ve had seven small orders since July 5 during a time when I usually ship 100 orders.”
An order runs from 1,500 to 3,000 lobsters.
Both Norton and Nadeau said there are rumors that Canada may be reselling live Maine lobsters, but they said there is no hard evidence of that.
Geoff Irvine, executive director of the Lobster Council of Canada in Halifax, said it doesn’t make sense for Canada to resell U.S.-sourced lobster, because the country-of-origin labels on the shipment would note the product is from the United States, and that would trigger the tariffs if it were exported to China.
“I don’t know why anyone would want to do that,” he said.
Irvine added that it is not unusual for Canadian airports to add flights to transport seafood exports this time of year. Still, he said business with China has been busier this year because of added demand from China and the tariffs, which dissuaded China from buying American lobster.
“In July, typically our processors buy a lot of Maine lobster,” he said. “And we have millions of pounds of lobsters that our exporters have in holding facilities.”
Canada exported $15.88 million worth of live lobsters to China in July 2018. The bulk of them, some $15.02 million, were shipped out of Nova Scotia. By contrast, the value of live lobsters exported from Maine to China fell 64 percent this July from July 2017.
Nationally, lobster exports decreased 28 percent in value in July 2018 compared to the previous July.
Wade Merritt, president of the Maine International Trade Center, said the decline in July exports of live lobster from Maine to China was not unexpected, and the center is actively trying to help the lobster industry expand alternative markets.
“Last week, senior trade specialist Jeff Bennett traveled with several Maine lobster companies to Seafood Expo Asia and this week on to Vietnam for a U.S. seafood trade mission looking to open new markets,” he wrote in an email to the Bangor Daily News. “In addition, Maine lobster will be featured at the Taste of West Cork Festival in Ireland this week.”