Nova Scotia

China is close to becoming Canada's largest export market for live lobster

China overtook the United States as the largest market for Canadian live lobster from August through October last year, continuing a trend of "dramatically increased" sales to China following the advent of a trade war between the superpowers.

U.S. still main destination, but China closing in as fallout out from trade war continues

Canadian suppliers are trying to fill the void left when American lobster was priced out of the Chinese market. (Brian Snyder/Reuters)

China overtook the United States as the largest market for Canadian live lobster from August through October last year, continuing a trend of significantly rising sales to the Asian country following the advent of a trade war between the superpowers.

Canadian live lobster sales to China outpaced those to the U.S. by $65 million during the three months, according to the latest export data released by Statistics Canada.

All told, $384 million of Canadian lobster was sold to China in the first 10 months of 2019, compared to $428 million for the U.S.

"Since the U.S.-China trade war, it's dramatically increased," said Geoff Irvine, executive director of the Lobster Council of Canada.

In July 2018, China slapped a 25 per cent tariff on United States seafood. Canadian suppliers moved in to fill the void left when lobster, primarily from Maine, was priced out of the Chinese market.

In eight of the following 15 months, live lobster sales to China exceeded those to the United States, which has long been the main destination for the live lobster.

Sales to China up 123% since 2017

From the beginning of 2017 until October 2019 — the most recent period for which sales data is available — sales to China increased by 123 per cent.

In 2017, sales totalled almost $173 million, increased to $257 million in 2019 and were $384 million for the first 10 months of 2019..

"It's been very good for the industry," said Irvine.

The Halifax airport is in the midst of a $36-million dollar upgrade to handle increased cargo flights spurred largely by lobster exports to China and other Asian countries. (CBC)

In the short term, Chinese demand has upended the economics of the lobster fishery. It has kept prices up at the wharf even as landings maintain historic highs.

Irvine said traditionally Nova Scotia — the main lobster producer — would send 45-kilogram crates to the United States and American shippers would take it to the world or consume it domestically.

"With this change to China, we're selling more lobster in boxes to the end market, which is a nice change. We're still always going to do a big business in crates to the U.S., but it's a nice change to go directly to the market," he said.

The Halifax airport is in the midst of a $36-million upgrade to handle increased cargo flights spurred largely by lobster exports to China and other Asian countries. Spokesperson Tiffany Chase said the shipments are becoming more of a year-round event.

"We expect 2019 to be another record year," she said.

A new cargo facility with expanded refrigeration will open in 2021, but the airport hopes a new apron to park cargo jets will be operating later this year in time for Christmas 2020 and the now-important Chinese New Year.

The costs are being split between Ottawa ($18 million), the Nova Scotia government ($5 million) and the Halifax International Airport Authority ($13 million).

A focus on diversification

Chase said the expansion will help pave the way for more lobster cargo flights to Europe, which has seen sales flatline despite a new free trade deal that cut seafood tariffs in European Union countries.

That's what Irvine would like to see as well.

"We're hoping we can diversify more. We never like to see ourselves all in one market and we're going to do more work in Europe in terms of our marketing and in other parts of Asia," he said.

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Paul Withers

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Paul Withers is an award-winning journalist whose career started in the 1970s as a cartoonist. He has been covering Nova Scotia politics for more than 20 years.

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