Lobster back on the menu but at a loss

While Nova Scotia live lobster was back on the menu for some in China, it’s at a significant loss for exporters in the province.

“There’s been modest shipments in the last week and a half to two weeks going to two to three major destinations in mainland China after about three to four weeks which there were none,” Stewart Lamont, managing director of Tangier Lobster, said on March 10. “This is a very modest first step to try and re-establish the marketplace.”

The coronavirus outbreak in China caused a big change in market demand for live lobster due to governmentimposed travel restrictions resulting in closed restaurants and hotels, restrictions on travel and closed retail market.

On March 7, one cargo flight containing lobster flew to China (CSX) from Halifax Stanfield International Airport.

“The flight was a Skylease aircraft operating on behalf of First Catch,” said Tiffany Chase, director of public affairs and marketing for Halifax Stanfield International Airport. “Skylease cancelled their two- to three-times weekly cargo flights into China in late January. This is the first flight to resume direct service to China since that time, (in) approximately six weeks.”

John Crandall Nickerson, manager at Clark’s Harbour Seafoods, a subsidiary of Atlantic Chican, said the flight represented “desperation by companies that held lobsters for First Catch for the Chinese New Year and now are sending these inventories.” It comes at a cost.

“(They are) losing $3 a pound, as the only way to liquidate to get some money back out of the loss and are dropping product into the market in China which is on intensive care,” Nickerson said.

Nickerson estimates live lobster dealers in the province have lost upward of $75 million since the collapse of the Chinese market due to the coronavirus. At the time of the collapse, the shore price was $10.50 per pound. Now it’s in the $6 to $7 range.

“It has hurt the pocketbook of everybody,” said Erica Smith, president of Fishermen’s Premium Atlantic Lobster Inc. on Cape Sable Island.

“The only thing moving the last few weeks are the supermarkets and stores and we had to bail in there with cheap prices to get rid of inventories,” added Nickerson. “Everybody who put lobster away, they put these lobsters away at high costs and are now selling at a loss of $3 per pound. The industry is being painted as being rebounding and it isn’t even anywhere close.”

Chase said on March 10 that the Halifax airport hadn’t received notification of a return to regular service by Skylease.

She said shipments have continued to South Korea over the past six weeks but at a reduced frequency of one flight per week, down from an average of four to five weekly flights, depending on the week or month.

“Some of the product that goes to South Korea makes its way into the Chinese market,” she said.

“The whole international market has been impacted,” said Lamont. “Exporters have 40 to 50 per cent of weekly sales they had a month ago and they’re making those sales, on average, 35 per cent less than they were, so it’s a challenging situation, but not the end of the world.”

Lamont said European and Middle Eastern live lobster markets have been impacted, as well.

“Every market in the world, even if there is no particular coronavirus outbreak in that particular country, every market in the world ironically has been impacted. Lesser volume, lesser demand and the requirement for a lesser price,” he said. “All the European and Middle Eastern markets continue to buy, just lesser volumes and lower prices.”