Canada’s live lobster exports to China have been improving, with volumes and sales at about 75 percent of 2021 levels year to-date thus far in 2022, according to Lobster Council of Canada Executive Director Geoff Irvine.
The lifting of lockdowns in Shanghai and Beijing have helped buoy demand from China for Canadian lobster, according to Irvine. But Canada’s exports of frozen lobster have not yet returned to the strong numbers the sector posted in 2019, according to Irvine.
“I do not know exactly why, but it is likely a confluence of factors, including strong competition from European and Asian countries, and possibly due to new labeling requirements that are in effect for exports to China, which means processors must choose during production where the product will be sold, which does not give them as much flexibility,” he said. “In general, exporters will choose to sell to those markets that pay the highest prices and have the fewest access requirements.”
Canadian processed lobster exporters have had to adapt to new Chinese customs tracing requirements implemented this year as part of the Chinese government’s response to COVID-19. Chinese Customs Decrees 248 and 249, which took effect in January 2022 for all processed food imported into China, requires Chinese-language labeling and identifiers inside and outside of packages. Exporters are also required to register via the China Import Food Enterprise Registration (CIFER) system, operated by the General Administration of Customs China.
Thus far, the rules apply only to processed seafood, including frozen and cooked products. But Irvine said he expects China to expand those requirements to the live export sector soon.
Also hurting Canadian lobster exports are concerns about access issues at Chinese ports, with Chinese customers also spooked by potential losses from new COVID-related restrictions in key areas of consumption – Chengdu entered a lockdown in early September – and port cities like Guangzhou and Shenzhen.
Canada shipped 9.8 million kilograms of live lobster to Chinese buyers in H1 2022, compared to 15.1 million kilos to American buyers. Exports of live lobsters to the U.S. were worth CAN 47 million (USD 35.7 million, EUR 36.1 million), while live shipments to China were worth CAN 80.3 million (USD 61 million, EUR 61.8 million), but those figures don’t mean sellers are receiving higher prices in China, Irvine said.
“The opposite is true – due to the highly competitive nature of the market in China, we often achieve lower prices per kilogram or pound in China compared to other markets. If you look at the data for year-to-date live lobster [sales] to the U.S. and China, the average export price to the U.S. is CAN 11.23 (USD 8.53, EUR 6.56) per pound and to China it is CAN 9.79 (USD 7.47, EUR 7.53) per pound,” he said. “ Some of this difference could be how the freight is reported. And there could be currency fluctuations at play as well.”
Photo courtesy of Libin Jose/Shutterstock
