Maine turns to Canada after losing China lobster market

Last year, the US state Maine exported goods of all types valued at $204 million to China, making it second only to neighboring Canada's exports of $1.4 billion, Census Bureau statistics show. But tariffs have cut off China, the fastest growing market for Maine's live lobster industry by 84 percent this year while exports of wood products are down 51 percent.

The Maine lobster industry is switching to other markets - as far away as Thailand and Vietnam and as close as Canada.

Maine-based lobster companies are opening operations in Canada and shipping lobsters from Nova Scotia because Canada isn't affected by the US-China trade dispute.

That reflects what Bill Bruns, operations manager of The Lobster Co in Arundel, has seen in his own export business. As a result, trade in lobsters from Canada is booming.

For Canadians "this has been wonderful", said Stewart Lamont, managing director of Tangier Lobster, an exporter on the eastern shore of Nova Scotia, Canada. "Exports to China are up 50 percent - and prices are up about 50 cents a pound."

"Not a day goes by that we don't get an inquiry from China looking to buy our lobster," said Lamont.

Ready Seafood of Portland, Maine, last fall acquired L. Walker Seafoods, a family-owned lobster holding, packing and processing plant in Nova Scotia, escaping the burden of tariffs and giving the company direct access to the Canadian catch.

Ready Seafood followed the lead of other lobster marketers, including Boston Lobster Company, and Garbo Lobster, a subsidiary of East Coast Seafood Group in Massachusetts.

Cross-border operations also give managers easy access to European markets because Canada has established close ties with the European Union. But operating in Canada can squeeze profits if lobsters are trucked south to Boston or New York.

Prior to 2017, Canada did not ship any lobsters to China or Europe. In July 2018 China imposed retaliatory tariffs on the US. Tariffs gave Canadian lobstermen an immediate 25 percent advantage over their US counterparts and the cheaper Canadian dollar sweetens the deal. The combination of tariffs and a favorable exchange rate created a new market.

Fresh lobster shipments to China from Canada were valued at C$256.2 million ($190.7 million) in 2018, up from C$172.7 million in 2017. The European market remains strong and there is a small but growing market for fresh lobster in the Middle East, Statistics Canada reported.

Some Maine lobster dealers that were shipping to China have adjusted their business models, said Annie Tselikis, executive director of the Maine Lobster Dealers' Association.

The industry as a whole will also "never know how strong those exports" could have been if the tariffs hadn't been enacted at all", she told the Bristol Press in February.

"We need to get China back on line," Jeff Bennett, senior trade specialist at the Maine International Trade Center in Portland, told the Bristol newspaper. "Anybody in the industry is going to tell you that."