Lobster exporters preparing for potential new Chinese regulations

The executive director of the Lobster Council of Canada said those in his industry need to be flexible as they deal with ongoing challenges brought on by high inflation, potential new import regulations, the COVID-19 pandemic.

Geoff Irvine said harvesters are facing mounting costs for fuel and bait, while processing plants deal with paying more for labour, packaging and shipping.

In addition, it's possible Chinese customs requirements recently implemented on processed foods could be extended to live lobster.

“They are in effect for frozen lobster, but we want to make sure we're ready in case they come for live,” Irvine told CityNews Halifax. “They have implemented two new decrees, 248 and 249, as of January 1 this year.”

“Our exporting companies now have to register directly with the Chinese customs authority, where in the past, the companies used to do it through the [Canadian Food Inspection Agency]. There's also new labelling requirements on inner packaging and outer packaging of all seafood and food products that show production date and expiry date all in Chinese and Mandarin.”

He said that all requires more time and labour for proper translation and printing.

“Most companies exporting today, in 2022, have had to staff up and get experts on their teams to look after all these types of market access challenges,” he explained. 

He said this isn't the first time the industry has had to deal with this. Each region lobster is exported to has its own rules and regulations that need to be followed.

According to Irvine, so far, there have been some hiccups implementing the new rules for processed foods, but right now the bigger issue impacting the industry has been ongoing COVID-19 lockdowns of cities in China.

“Reopening and closing, that has impacted our export numbers to China for live lobster the last few months. We're down about half in value and volume, so we're hoping China fully reopens because that's a very important market for our live lobster and frozen.”

“On the flip side, the Chinese importers have bought more frozen in-shell lobster than they did last year.”

Irvine said the United States —  Canada's biggest export market — bought more frozen and live lobster than ever during the pandemic, but that could change with inflation.

“The price of fuel really impacts people who buy lobster. They're going to fill their tank up before they go have a lobster tail or a lobster dinner, so that's really impacted prices,” he explained.

“Nobody has to buy lobster, but they have to buy gas, they have to buy milk and some other things.”

But Irvine said there is pent up demand for dining out now that COVID shutdowns have lifted in other parts of the world.

“During the pandemic, we built up a nice, steady demand for lobster tails, lobster meat, and I don't see that going away completely at all,” he stated. “I think we're going to be okay, but we're seeing an adjustment in the market, demand and where products are going.”

“These market access issues, like we're seeing with these new decrees in China just make us realize we have to stay diversified, and we have to be nimble, and we have to stay on top of things.”