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Lucky lobsters jamming China flights send US prices to record

Every Sunday for the past seven months, about 60,000 live North American lobsters packed in wet newspapers and Styrofoam coolers make the 18-hour flight to Asia in a Korean Air Lines Co cargo plane.

Every Sunday for the past seven months, about 60,000 live North American lobsters packed in wet newspapers and Styrofoam coolers make the 18-hour flight to Asia in a Korean Air Lines Co cargo plane.

The 12,000km trip from Halifax, Nova Scotia, to Shanghai via South Korea has become a weekly routine this year with a surge in demand from China, where lobsters caught in North Atlantic waters are at least one-third the cost of competing supplies. As a result, exports have skyrocketed from Canada and the US, the world's top producers, and American prices are the highest ever.

With no lobster industry of its own, China had relied mostly on Australian imports to satisfy growing demand as its middle class expanded. When the catch began shrinking off Western Australia, and a 2012 glut in the Gulf of Maine sent prices plunging in the US that year, it became more attractive for the world's most-populous nation to buy from halfway around the world.


"When the domestic market collapsed, we looked farther and farther" for buyers, said Stephanie Nadeau, who shipped 2.5 million pounds last year by air to China for The Lobster Co in Arundel, Maine. "I never sold a lobster to China until 2010. It was the really low price and the dealer's desperation here because we had high catches and a god-awful economy. We had to move the lobster."

US exports to China rose to 8,560 metric tons last year, up 22-fold from 2009, US Department of Agriculture data show. Shipments already are up 12 per cent in 2015.

It's easy to see why. Chinese importers shopping on can buy live Canadian lobsters prized for their tail meat and big claws for US$6 to US$10 a pound, according to the website, compared with US$20 to US$33 for Australia's Southern rock lobsters - a different species that doesn't have claws.

Increased demand from Asia provided a new outlet for US producers who saw prices drop after their catches expanded by 66 per cent in the decade through 2013 to 68,000 tons.


Buyers in Asia want their lobsters live at markets and restaurants. To survive the long trip, the sea creatures should arrive within 48 hours of being removed from water tanks, exporters say.

"You don't get paid for dead lobsters," Ms Nadeau said. She added more refrigerated trucks and a storehouse in Canada with a tank to ensure stable supplies all year round, including during the busy Chinese New Year.


Not everyone is cheering the export surge. US supply tightened this year as harsh winter weather slowed the catch in Canada and frigid ocean temperatures in Maine kept lobsters away from shallow waters where they're trapped, delaying the summer harvest, according to Michael Gardner, president of Halifax- based Gardner Pinfold Consulting.

Wholesale Canadian claw and knuckle meat is up 32 per cent from a year ago, touching an all-time high of US$22.75 a pound on July 31, according to research company Urner Barry, which has been tracking food prices since 1858.

Steve Kingston, owner of The Clam Shack in Kennebunkport, Maine, has had more difficulty securing the 1,000 to 1,500 pounds he needs every weekend. With costs up as much as 60 per cent, he raised prices, though he said sales of lobster rolls are up 10 per cent this year from last.


For now, there's no sign of Chinese demand slowing, and North American supply is a preferred option after declining numbers of baby lobsters reduced Australian supplies by almost half in the decade through 2013, according to government data. In the same period, exports to China fell 60 per cent.

China's middle class may surge to 1 billion people by 2030 from about 150 million last year, boosting incomes that will drive demand for all kinds of higher-value foods, including crustaceans, said Abhay Sinha, a senior food and retail analyst at London-based researcher Technavio.

The country already consumes 35 per cent of the world's seafood, and by 2019 will boost consumption of all crustaceans, including crab and shrimp, by 50 per cent from last year.

Lobsters are viewed as a status symbol in China, and their red colour is considered lucky, Sinha said.

"Cooked lobster does the trick," said Richard Wahle, a marine sciences professor at the University of Maine.