Coronavirus dampens demand for lobster

ELLSWORTH — Already battered by the ongoing trade war between the United States and China, the market for lobsters took another hit last month as the Chinese New Year festivals celebrating the Year of the Rat were tempered by the more or less simultaneous onset of the year of the coronavirus.

The start of the New Year in China — this year on Jan. 25 — is usually marked with festivities and celebrations. In an increasingly prosperous nation, those festivities frequently involve dining out with Maine lobster a popular choice amongst a growing middle class. One reason, according to lobster exporters, is that cooked lobsters are red — considered a lucky color among the Chinese.

This year, the celebrations were muted at best and the demand for lobsters dropped precipitously, though exact numbers are hard to come by. Early in January, a new virus emerged around the city of Wuhan in central China. Within weeks, the virus has spread to other areas of the country and has begun to spread to other regions of the world. The World Health Organization has declared an emergency and the United States and Canada have imposed tough entry restrictions — including quarantines and outright bans — on people traveling from China.

The Center for Systems Science and Engineering at Johns Hopkins University has been tracking the spread of the coronavirus. As of Sunday night, the center reported 17,489 confirmed cases of infection worldwide, with 17,306 in mainland China. There were 362 deaths attributed to the viral infection in mainland China, with 350 concentrated in the Chinese province of Hubei, primarily around the city of Wuhan, where the coronavirus first became evident.

Outside China, as of Monday, only 11 cases had been reported in the United States and four in Canada with no deaths in either county.

The Maine lobster industry is watching to see if what some public health authorities fear could become a pandemic may be having an effect on the market for lobster.

“We are closely following developments related to the coronavirus to determine if there is any support we can provide from a marketing perspective,” Marianne LaCroix, executive director of the Maine Lobster Marketing Collaborative, said Monday. “It’s difficult to determine current impact from the export data we have available.”

The Maine lobster industry was already suffering from the effects of the 2018 tariffs China imposed in retaliation for U.S. tariffs on Chinese goods.

According to Wade Merritt, president of the Maine International Trade Center, in 2018 Maine’s live lobster exports totaled nearly $386 million. Of that, 14 percent, about $54 million, went to China. Through November 2019, the most recent data available, “just 7 percent of live lobster exports were destined for the Chinese market.”

The 2018 numbers appear to show that the tariffs play a significant role. From January through June, Maine live lobster exports to China were up by 170 percent compared with 2017. For the second half of the year, Maine live lobster exports to China dropped by 67 percent compared with the second half of 2017. China’s retaliatory tariffs went into effect on July 6, 2018.

In mid-January, President Donald J. Trump signed an interim “Phase 1” trade deal with China that could bring some relief to the Maine lobster industry.

Besides addressing broader issues in the U.S.-China trade dispute, the agreement calls for China to buy an additional $200 billion worth of American goods and services over the next two years compared with 2017 levels. A fact sheet handed out by the U.S. Treasury Department at the time of the signing included “seafood products” in the mix of what China would buy and a footnote expressly included lobster in that category.

In the meantime, until the coronavirus complicated things, Canada seemed to be selling all the lobsters to China that the United States wasn’t. According to Statistics Canada, in the first 11 months of 2019 Canada shipped almost 52 million pounds of live lobster, worth some $409.5 million, to China, making it the top market for the volume of Canadian live lobster exports. In all, Canadian live lobster sales to China have increased by 123 percent since 2017.

Canadian sales have pretty much ground to halt since the onset of the coronavirus outbreak. According to reports this week in the Canadian press, the two or three weekly cargo flights carrying seafood to the Chinese market that regularly go out of the Halifax Stanfield Airport in Nova Scotia have been canceled for the foreseeable future.


Stephen Rappaport

Stephen Rappaport

Waterfront Editor at The Ellsworth American
Stephen Rappaport has lived in Maine for nearly 30 years. A lifelong sailor, he spends as much time as possible messing about in boats. [email protected]

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