SADC REGIONAL INFOPECHE UNIT
INFOSA MARKETING INFORMATION AND TECHNICAL ADVISORY SERVICES FOR THE FISHERIES INDUSTRY IN SOUTHERN AFRICA
MARKET REPORT Lobster Market Report - February 2008
HONG KONG / CHINA Live Demand for spiny lobster after the Moon festival (mid August) strengthened partly due to the limited traditional supply channels and generally lower arrival condition of this year’s Mexican production. Prices of Mexican lobster started at USD$35 per kg CNF Hong Kong (mid September) while the cold water Jasus species from New Zealand and South Australia were fetching USD$58/kg CFR and more. By mid October, demand in Mainland China started to fall and by early November many importers were refocusing on the cold water New Zealand and South Australian Jasus species. As the West Australian season opened (15 November) demand had stalled and prices soon plummeted particularly for 400 – 600g sizes: New Zealand prices dropped below the USD$40/kg for these sizes as the Western Rock Lobster entered the market at USD$34/kg for the same sizes. Interestingly large sizes, 800g – 1.5kg lobster of all species, varied little in price at this time. Generally poor demand continued throughout December leading up to Christmas with limited purchases of all origin smaller sizes. With pre-Christmas demand strengthening, prices raised $2 to $3 per kg on December averages and were expected to continue throughout January and early February in the approach to the Chinese New Year celebrations (this year February 8th). The upward price trend was assisted by the continued heavy rains and rough seas in Indonesia, India, Myanmar and Malaysia which heavily reduced lobster fishing for the warm water species (panulirus sp.) from these regions by end 2007. (the outlook for early 2008 remains largely unchanged for these small size producing areas). Exporters are predicting similar highs to the previous year with prices forecast to reach over USD$50 for West Australian product (p. cygnus) and into the high $60’s for the Jasus species of New Zealand and Southern Australia. Frozen In general there was minimal growth noted in imported quantities of frozen lobster into Mainland China although with increased live lobster landings, the associated sales of frozen whole raw and raw tails resulting from mortalities is increasing. Even through prolonged periods of high live market prices, there seemed little movement towards frozen substitution from imports apart from the usual pre-Chinese New Year expectations. Speculation continues on increased frozen lobster consumption in China leading through to the Beijing Olympics although very few forward delivery contracts are noted to be in place. TAIWAN Live From 15th September through mid November, Taiwan buyers were clearly focused on the opening season of live Mexican lobster starting near US$34/kg and, during peak landings, discounted to around US$28/kg CFR but with prices averaging near US$32/kg and rising towards US$40/kg by early January 2008. Mortality for Mexican lobster was notably higher than 2006 for reasonable periods and averaged between 10 – 15 % on landing into Taiwan. Mortality results into the further transit markets of Hong Kong/Shenzhen were higher again. Comparatively speaking, the demand in Taiwan for live lobster has continued to decline due to competition with substitutes of frozen lobster or other product types such as king crab.
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INFOSA Frozen Taiwanese demand in 2007 shrunk considerably against the enormous demand of previous years with high prices forcing widespread menu changes. Following limited imports in 2007, stocks of Cuban (p. argus), Florida (p. argus) and West Australia (p. cygnus) whole cooks had mostly declined by September with consequent renewal of interest for year end purchases both by air and sea freight options. New season West Australian CFR sea freight prices started at between US$26.50 and 27.50/kg for 460-570 gr and between US$27.50 and 28.50/kg for 380-460 gr for early purchases of whole boiled products. On arrival by early January 2008, markets were noting signs of price instability and purchasing caution for 450g+ sizes especially against Florida and Cuban product. Imports of cheaper and smaller cooked Indian and similar species (p. polyphagus and p. homarus) however continued to find support. As in Japan, oversupplies of whole raw product from sizes 50g to 500g continued to frustrate importers and was compounded further by cheaper, discounted raw products resulting from daily live shipment mortalities. In essence higher prices for all frozen products held up which resulted in continued menu deletion or customer rejection of a similar magnitude to the reduction in general supplies. The market by early January 2008 was reported as slow but stable with traders anticipating possible changes ahead of the February 2008 political elections.
JAPAN Live Generally it can be said that the demand for live lobster in Japan has been poor all year and that the leadup to Christmas was no different. The limited demand was quickly soaked up by reasonable local catches (p. japonicus) which held up until late October when demand for other species including (Homarus Americanus) started to increase. It also saw the start of the Western Rock lobster season where the prices opened at 4400 yen per kilo for the Live Red A size and 4200 yen for the Pink A. Demand thereon rose steadily right through to Christmas and New Year. It is interesting to note the ever reducing sales of New Zealand (j. edwardsi) product into Japan, showing the ever increasing appetite and more competitive interest from the Chinese market even during low demand periods. Frozen Indonesia tripled its frozen production (panulirus sp.) and its sales of both raw and cooked small sizes (100-250g) to Japan in 2007, eating into the Indian lobster market share. Recent poor weather and lower new season frozen production from Indonesia should provide welcome assistance for inventory holders. In the larger size category, imports of Cuban (p. argus) whole frozen production continued its dramatic 22 February 2008
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INFOSA slide of the past 3 years due to both poor catches and increased demand from EU and other markets with low inventories. It may be noted that Cuban landings finished 2007 just up on 2006 with 4600/4700 tonnes. African (j. lalandi) origin frozen shipments in total were well up on 2006 even with significantly reduced Namibian landings. In particular, an oversupply of whole raw product has been noted although there is still plenty of room and interest for new season cooked production. With escalating West Australian (P. cynus) frozen prices, Japanese demand shifted to focus on Red A type (380/460gr) which peaked at US$31-32/kg, with Pink A type prices of US$28-29/kg uncompetitive against Taiwanese buyer demands – a trend forecast to continue well into the future low production seasons of 2007/08 and 2008/09. As at early January 2008, the Japanese frozen lobster market was reported as slow but fair. UNITED STATES Live There has been a notable increase in Asian style restaurants using live spiny lobster in the USA over 2007 for both domestic and imported species, however the overall quantity would still be considered to be only at niche level. Frozen The ripple effect of the sub prime mortgage crisis continues to have an impact throughout the seafood sector with the lobster sector said to be one of the major casualties. Stories of menu deletion or significant reductions in consumption are rife, however these could be overstated due to some panic selling by traders accustomed to the almost endless upward market movements of recent years. Warmwater tails buyers were unusually cautious as they observed later than normal volume offers following the 45 day delayed start to the Brazilian production season. Following the poor production of Caribbean lobsters (p. argus) in 2006 (specifically from Brazil) and low carry over US with inventory levels, prices opened and remained at record highs resulting in slow moving stocks and supplier diversions to non traditional or non core markets in bigger quantities. By late December 2007, major p. argus importers that had adjusted ex-store sale levels downward to remedy their positions were noting improved sales and inventory clearances although suffering from zero or only very minor margins. The outlook for early 2008 warmwater tail sales although now steady, remains somewhat cloudy. With volume diversions to other markets, major warmwater producing seasons now closed and continued lower global production, the US market may be fortunate to find a more positive outlook in 2008. Coldwater tails: with continued high target prices and weakening US demand, sales of African (p. gilchristi and j. lalandi) and West Australian (p. cygnus) tails were unable to hold in the volume production grades under 8 oz and as new seasons approached, US brokers worked hard to reduce inventories and re-work pricing accordingly. Inversely, inventories of larger sizes (8oz and bigger) were scarce and resulted in pre New Year air deliveries for immediate sale. The absence of many large scale tail procurement programs of recent years and changing menus have been widely reported. Lower forecasts for tail production and US targeted sales is expected to find a balance against the obvious demand reduction.
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MIDDLE EAST An increase in general demand for lobster products both live and frozen was evident by end 2007 and growth is expected to continue. Although size and price demands range across a full spectrum utilizing local smaller and lower priced catches along with an assortment of imported origins and product types at both high and low market ends. VALUE ADDED Year by year, value added lobster products are finding successful global market acceptance with splitting, splitting and cleaning, special cryogen freezing, medallions, sauce / soup by-products etc. However in 2007, it would appear that the most significant value addition has resulted from improved receival and export logistics systems allowing for greater flexibility and there-in increased volumes targeted to the premium live or whole frozen markets as dictated by opportunity rather than by capacity. AUSTRALIAN AND SOUTH AFRICAN PRODUCTION INDICATIONS
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Greg Hart © FAO GLOBEFISH 2007
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