Going into the fall, the lobster sector is facing market access challenges in nearly every key market.
These challenges will require additional human resources and support by trade organizations to ensure smooth movement of live and frozen lobster products, says Lobster Council of Canada (LCC) executive director Geoff Irvine.
“In Europe, we continue to work with live and frozen exporters to transition to the online health certificate system, TRACES NT. In general, this has been a positive transition as most prefer the ability to order certificates online,” says Irvine.
“The challenging part has been that due to new animal health laws, each health certificate must now be signed off by a CFIA (Canadian Food Inspection Agency) veterinarian. The CFIA vets belong to a union and work a Monday to Friday, 6 a.m. to 6 p.m. workday, which has meant a transition period for live lobster shippers to get used to this change of service. In the past, they could have certificates pre-signed and be available as needed at anytime, now they must order online and work around the vet schedule. CFIA has been working closely with the lobster sector to provide weekend service during busy periods and we continue to work together to improve the service level,” said Irvine.
“In the United States market, there are continuous underlying challenges as we manage interactions with North Atlantic right whales and await the Marine Mammal Protection Act comparability finding ruling. There are also strong indications that a rulemaking process will begin by the end of 2022 that will eventually bring all seafood species into the U.S. Seafood Import Monitoring Program, meaning all seafood imported into the U.S. will need full traceability back to the fishing vessel.”
As for the Chinese market, additional tracing measures that took effect in January that require Chinese-language labelling and identifiers inside and outside of packages for all processed food imported into China has been challenging, said Irvine.
“Lobster processors are adjusting to the new labelling regulations, but it is a challenge given that products like whole cooked and raw lobster are often produced before a final market is known so labelling after production is costly and time consuming. The largest challenge is the new regulations around registering production facilities directly with Chinese customs authorities (GACC — General Administration of Customs China). I understand there is a backlog of 160 Canadian food companies waiting to be approved and that is only Canada, every country in the world that exports to China faces the same regulations. New and existing lobster exporters will need to fully understand the rules and time required to achieve approval from GACC.
As for markets during the early summer, demand has been typical, said Irvine.
“The economic environment in all markets for live and frozen lobster is much different in 2022 than we experienced in 2021. In 2021, there was pent-up demand for travel, consumers had money to spend from savings and government stimulus and they spent it on special treats like lobster and crab. Inflationary pressures from higher interest rates, fuel and food are the story in 2022 and this has impacted all premium seafood categories, including crab, scallops and lobster,” said Irvine.
“Live lobster markets have adjusted from the record export values of 2021 to a more typical recent level with decent volumes and value of exports to the U.S. and Europe with ongoing COVID-19 shut-downs leading to lower volumes and value to China. Logistics remain a major concern along with increased costs for everyone in the lobster value chain from harvesters to exporters. The frozen market is working hard with lobster meat and tails facing challenging demand from retailers in the United States and competition from processors in Maine. There was a bright spot with good demand in the spring for whole in-shell products in Asia and Europe. Processors involved in the crab market are also dealing with a challenging environment as the crab market in 2022 is drastically different from 2021.”
Irvine said the entire sector is hoping for a strong summer and fall sales period as people continue to travel and adjust to the current economic environment worldwide.
“Canadian lobster in all product forms offer a sustainable, healthy and delicious protein option and we are confident that our sector will weather the current situation very well.”