Nova Scotia

Clearwater sees sales grow in China despite diplomatic tensions

China accounted for almost 27 per cent of Clearwater's sales in first quarter of 2019, up from almost 18 per cent a year prior, with no indication business is slowing.

China accounted for almost 27% of Clearwater's sales in first quarter of 2019

Clearwater says there is a growing demand for lobster in China. The company appears to be another Canadian beneficiary of the Chinese imposition of a 25 per cent tariff on American lobster in 2018. (Brian Snyder/Reuters)

Canadian seafood giant Clearwater Seafoods saw sales to China increase by more than 50 per cent in the first quarter of 2019 compared to a year ago and says it sees no slowing down in its business with the Asian superpower as diplomatic tension between Canada and China spills over into trade.

"We're all concerned about this, but we also believe that Canadian seafood and Nova Scotia seafood has a very strong reputation for quality in the China market," Clearwater CEO Ian Smith said in a media conference call after the company released its first quarter financial results on Tuesday.

Smith noted Nova Scotia Premier Stephen McNeil was recently in China on a trade mission that promoted the province's seafood industry.

Almost 27 per cent of Clearwater sales, worth $32 million, were in China where the company sells lobster, clams, cold water shrimp and turbot. For the first quarter of 2018, China accounted for about 18 per cent of Clearwater's sales.

The Nova-Scotia based company said sales in China increased 52 per cent in the first quarter compared to the year before because of "a broad-based shift into China across multiple species."

Growing demand for lobster

Clearwater also cited growing demand for lobster.

The company appears to be another Canadian beneficiary of the Chinese imposition of a 25 per cent tariff on American lobster in 2018.

The move crippled sales of Maine lobster.

This spring, Canadian farm exports began hitting obstacles at Chinese ports with claims from authorities that shipments of canola, soy beans and pork from Canada did not meet regulatory standards.

Canadian businesses say China is using non-tariff barriers to express its anger over the arrest of Huawei Technologies executive Meng Wangzhou in Vancouver on a U.S. warrant.

Meeting Chinese standards

Clearwater said it is meeting Chinese standards.

"We have seen no indications of a slowing of our business with China. And we continue to remain in full compliance with all food-related regulations," Smith said.

Canola has taken the brunt of Chinese measures with shipments blocked on the grounds it is contaminated, leading to fire-sale prices in other countries.

One Canadian exporter has said the goal has been to scare Chinese customers off Canadian products.

Relationships 'remain strong'

Clearwater customers are sticking with the company, Smith said.

"Our relationships with our Chinese customers remain strong, and importantly, our Chinese customers remain cautiously optimistic," he said.

China is an increasingly important market for Nova Scotia seafood with sales now in the hundreds of millions of dollars.

Clearwater said it achieved sales of $120 million for the first quarter of 2019.

About the Author

Paul Withers

Reporter

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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