$9 shore price creates lobster season ‘bottleneck’
An unprecedented shore price of $9 in December for lobsters has created a bottleneck in the supply chain, says a Shelburne County buyer.
“We created a bottleneck,” said owner of Cotter’s Ocean Products in Lockeport, Mike Cotter. “The fishermen have a lot of inventory, the buyers have a lot of inventory, product didn’t move like it usually does in the month of December, so we put it away, tubed it, trayed it. There’s a lot of Chinese buyers in Nova Scotia. They’ve got inventory. They know we’ve got inventory. They are making us sweat and we are sweating, believe me.”
So far this season the Chinese market, “hasn’t taken a big amount of our products up to this point,” said Cotter.
“There has been no problem to get air space this year. Usually we’re fighting to get airspace,” he said, estimating 40 percent of available cargo space was not used in December. “It’s not a matter of getting product out. It’s a matter of getting a price to make it worthwhile. There’s such a fine, fine margin on your air fright product.”
Statistics on air cargo freight from Halifax Stanfield International Airport for December won’t be available until February.
With the December market gone, Cotter said buyers are “looking at the Chinese New Years as being one of our biggest markets and the Chinese are not increasing the price.”
“I’m not saying the Chinese cannot afford to pay the prices we want for lobsters. They’ve paid higher prices than these before, but they know what we’ve got,” he said. “Next week will tell the tale when people start pushing product out for Chinese New Years. If it puts up the price up a bit that’s great, but I don’t see it. Its just crazy. Everybody right now is sharpening their pencils and cutting wherever they can cut to make this work. It all may change for Chinese New Year’s. They might increase the price and that would be great, or they might keep it the same and then it will a struggle for the month of February.”
It was the buyers themselves, not market demand, that drove the shore price to $9 within two weeks of the season opening on Dec. 1, when initial landings were down by an estimated 30 to 40 per cent in Lobster Fishing Areas LFAs 33 (Eastern Shore to Baccaro) and 34 (Baccaro to Burn’s Point Digby County).
“Some buyers went a little strong in the beginning,” said Cotter. “Everybody thought there was a shortage of lobsters.”
As it turned out, fine fishing weather prevailed throughout December. Landings have remained stable in LFA 33, said Cotter. “Our boats fished 16 days straight out of 17 days in December. Its been an unreal season for them. Fishermen in 33 have had an excellent season so far. I don’t think landings are going to be down as much as initially thought.”
The higher shore price did cause pressures with customers in December, said Leo Muise, executive director of the Nova Scotia Seafood Alliance.
“Most sellers have received push back from the market place and margins are challenging,” he said. “Hardest hit is the processing sector. Very few lobster have gone to the processing sector because of the high price.”