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Glimmer at End of the Pandemic Tunnel

It is no secret that the COVID-19 pandemic has shaken the global seafood industry to its core.

Traditionally, Atlantic lobster has been one of the key commodities driving the seafood engine locally and around the world. So, what will the 2021 lobster season have in store for harvesters, buyers and processors?

A mere 12-14 months ago, not even the world’s biggest pessimist would have predicted the pandemic-driven fear and turmoil that gripped the entire globe. But it happened and the fishery, with a few bumps along the way, endured. Lobster fishing areas (LFAs) 33 and 34 were caught in the midst of the global shutdown this past March. But the local lobster fishery, declared essential by the federal government, kept going, despite the uncertainty.

So, how will this SW Nova season fare?

LFA 33 opened on time on November 30, however, LFA 34 was delayed until December 8 after numerous weather-related delays.

During these unprecedented times, what will the markets be like this season?

Some analysts are stating that there is a severe shortage of lobster inventory currently, which would bode well for harvesters. However, others are saying that the North American demand for live product has been sluggish over the fall.

This begs the question of how aggressive will suppliers be to secure product to satisfy the upcoming holiday demand, followed by Chinese New Year? This year, Chinese New Year takes place on February 12.

In many key markets, including the U.S., the COVID-19 landscape has not changed much since the first quarter of 2020, in fact, active cases are on the rise, leading to limited and even prohibited restaurant re-openings with additional lockdowns occurring across Europe.

Well-known seafood analyst John Sackton recently offered his insight into Atlantic Canada’s most lucrative fishery. In his December report to the New Brunswick provincial government, entitled Issues for New Brunswick Seafood Industry to 2021 Lobster, Sackton explained that the pandemic created fundamental shifts in consumers’ buying habits, particularly for seafood.

In the 2020 food service and restaurant industries, business was down considerably, with distributors reporting a minimum of a 25 per cent drop in business.

However, several pandemic trends actually helped sectors of the seafood business, including a big increase in home cooking, particularly of frozen products created by the continued emphasis on public health measures.

In fact, “not only did seafood outperform other proteins, but crab and lobster saw the greatest increase,” Sackton explained.

The initial fear of lack of markets led to low lobster prices in the spring, however, heavy demand of retail seafood led to more sales and frozen lobster saw increased interest from food service that improved over the summer. Heavy local tourism or staycationers along the U.S. East Coast also supported an increase in outdoor dining for lobster.

“Both live and frozen lobster pricing have recovered from the shock of the pandemic. Lobster pricing is currently driven by shortages. This presents a very risky environment for buyers. Customers are currently not in a good position to accept price increases, so overall markets are smaller right now,” Sackton explained.

And then there is the Chinese market.

The U.S. is still, by far, the biggest importer of Canadian seafood, but China has quickly gained ground and is now the number two export market.

China will be an important factor in the 2021 lobster season. Ironically, it is the first major country and seafood import market to show an economic recovery from the pandemic.

Sackton said that China’s September purchasing index was actually 60 per cent higher than the forecast, adding that the Asian powerhouse is the only major economy expected to post a 2020 gross domestic product (GDP) increase.

But the current Chinese market is still a challenging one.

“Imports of other foreign foods to China have slowed due to the country’s inspections and campaigns against imported food. This will have an impact on lobster sales, even with a strong New Year’s celebration. As a result, China may not match prior years’ imports. Import and shipping delays due to overloaded inspectors will also create expensive problems for shippers, not to mention that all imported seafood requires COVID-19-free certificates.”

So, is there a slight gimmer at the end of the proverbial pandemic tunnel? It certainly appears to be.

With vaccinations now starting to roll out across North America and other parts of the world, consumer spending and confidence will slowly start to bounce back, as well as other restaurant and hospitality-related industries.

There is no doubt that the seafood industry, notably lobster, fared much better than others through 2020. Let’s hope now that harvesters have a safe and productive season, prices start to rebound and the demand for Atlantic Canadian seafood continues to grow.