YARMOUTH, N.S. — The sudden and unexpected temporary loss of the Chinese market for Nova Scotia live lobsters due to the coronavirus epidemic is creating a panic situation for the lobster industry.
“It’s a real, real mess,” said Lockeport lobster dealer Mike Cotter, of Cotter’s Ocean Products.
“We were at $10.50 Friday (Jan. 24) and Monday (Jan. 27) the shore price went to $8. What’s happened is China is completely shut down. We have nothing going to China now. What’s going on has caused sales everywhere to drop.”
Cotter said it isn’t so much cancelled air freight shipments as it is the cancelled orders that has closed the market.
“It’s not so much the airlines that cancelled. Its the customers that have cancelled. There’s no live lobster going to China,” he said.
There’s no live lobster going to China
Tiffany Chase, director of public affairs and marketing for the Halifax Stanfield International Airport Authority, said cargo shipments transported directly into China by air cargo carrier Skylease are temporarily impacted as a result of travel restrictions in place within China connected to the coronavirus.
“This could impact two to three weekly cargo flights containing seafood products that normally go out of Halifax Stanfield to the Chinese market. Skylease has advised they expect these flights to be impacted at least for the next few weeks and we continue to be in close contact with all our freight forwarding partners as we monitor the situation,” said Chase.
Cotter said there is a lot more inventory around than what people anticipated there would be.
“Some people had inventory put away for the Chinese New Year that never got all their product over there in time,” he said. “I’ve been talking to a lot of guys since Friday and there’s not one person that isn’t going to lose money being a dealer on what’s happening. It’s a panic situation. A lot of people don’t realize how bad it is. If you only had 50,000 pounds of lobster and lost $2.50 a pound that’s a lot of money;” $125,000 to be exact.
“Everybody’s trying to push lobsters into the U.S. now so they flooded that market on Monday. To be honest we have no sales at all for our lobsters at this point,” said Cotter.
“The European customers see the price coming down and seeing everybody with a big inventory. They don’t want to buy lobsters from me today. They’re able to but they don’t want to because if they think the price is going to drop to $6 then they’re stuck with a $2 price on inventory," said Cotter. "Everybody is kind of laid back including the Americans to get what they can get as cheap as they can get it. There’s only so much you can put into the market. We have to hold tight and see what happens. Things could change in another week.”
Anyone who was in the industry through the last 20 years … knows that these things happen
Geoff Irvine, executive director of the Lobster Council of Canada said he would “urge everyone to remain calm."
"These types of market gyrations are unforeseen and this is a good opportunity to remind ourselves how important it is to have a diverse market around the world for our lobster products and the importance of marketing and promotion," he said. "Anyone who was in the industry through the last 20 years with 9/11, SARS, the H1N1 flu pandemic and the great recession knows that these things happen, often out of the blue and once again remind us how important it is to have diversified portfolio of customers.”
According to Statistics Canada data, for the first 11 months of 2019 a total of 23,624,875 kg of live lobster worth $409,487,924 was shipped to China, making it number one for the volume of Canadian live lobster exports. The volume of lobster export to the U.S. for the same time period was 20,569,649 kg with a value of $448,939,432.
Chase said during peak times of year, “we typically see seven to eight weekly cargo flights depart Halifax Stanfield for Asian markets with seafood products. The value of these flights varies by market price – a 747 freighter can transport around 100 tonnes of product when it’s full.”
In 2018, Nova Scotia seafood exports by air were valued at $232 million annually.
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