Another week brings yet another twist in the ongoing saga of tariff developments. As we begin to navigate through the second full week of March, there has been a temporary halt to the Trump 25% tariff on Mexican and Canadian goods, with a pause in effect until April 2. Amidst this uncertainty, a new development has emerged: China has announced the imposition of a 25% tariff on Canadian lobster, set to take effect on March 20. This kind of unpredictability can wreak havoc on markets, causing disruptions in trade dynamics and injecting a significant degree of instability into global supply chains. As the market tries to pivot and shift in response, the timing proves challenging, leaving businesses grappling with an unsettled and rapidly changing landscape.
Supply/Demand: Despite the calendar turning to March, persistent winter conditions, particularly strong winds, continue to disrupt fishing activities, resulting in fewer productive days at sea and consequently lighter landings. Additionally, any reserves from the autumn fishing season have been exhausted, potentially earlier than usual. This depletion is attributed to quality issues that affected the fall catch, further complicating the constrained supply situation.
In 2024, Maine’s lobster harvest totaled approximately 86 million pounds, marking a 15-year low. According to NOAA, YTD 2025 (Jan-Feb) landings are down 21.11% compared to the same time last year. In 2024, total lobster imports from Canada, encompassing both live and frozen forms, reached 97 million pounds, an increase of 9% year over year. This growth is primarily attributed to the robust spring fishing season in Canada, which typically leads to a surge in lobster availability by June. This seasonal influx is critical not only for meeting domestic demand but also for bolstering international trade, particularly with the U.S. market.
While domestic demand remained subdued in early 2025, exports to China in January 2025 saw a notable increase of 11.6% year-over-year, timed with the Chinese New Year festivities. This surge resulted in the second highest export volume for January on record, only behind the 2.8 million shipped in January 2018, before the imposition of the original 25% tariffs under the Trump administration. Market observers have noted that despite the volume increase, Chinese buyers have shown a strong price sensitivity, favoring smaller-sized lobsters from Maine which are offered at more attractive price points.
Prices: Market prices typically peak around the end of March and early April when the net supply is at its lowest. However, market participants this fall, and winter have again reported a heightened price sensitivity among their buyers, domestically as well as overseas. In the past, buyers were willing to pay premium prices to secure necessary inventory. Yet, the current economic environment, marked by persistently high food prices and fears of an impending recession, has made them more cautious. Additionally, the unpredictable nature of tariffs has contributed to market instability. While supply remains tight, replacement remains steady as market participants cautiously evaluate the situation. However, this balance is precarious and could shift rapidly as new developments arise. New England halves are trading 15.87% below this time last year, yet 11.83% higher than the 5-year average price of $13.61.
With six plus weeks remaining until the start of the Canadian spring lobster season, the replacement cost in Canada is approximately $5.00 lower than at this time last year, when prices reached a record high of $20.00 CAD. As March progresses, we usually observe a decrease in Canadian replacement costs. This trend is driven by market participants who anticipate a surge in supply from the upcoming season’s catch, adjusting their strategies and expectations accordingly. With the impending implementation of a 25% tariff on April 2, there is likely to be additional pressure to reduce the shore price. The impending tariff may prompt market participants to lower prices to stay competitive and manage the increased costs expected once the tariff takes effect. Meanwhile, fishing activity has been minimal, emphasizing that the Canadian Spring lobster season is still some time away, with significant preparations and waiting periods ahead.
The lobster market is likely to remain in a state of flux in the near term, as stakeholders await more definitive developments that could shape the industry’s trajectory. A critical question looms: will the 25% tariff set for April 2 actually be implemented, and if so, how long will it last? Similarly, the duration of China’s tariff on Canadian lobster remains uncertain, adding further complexity to the market dynamics. These uncertainties underscore the ongoing necessity for diversification within the supply chain, emphasizing the importance of exploring new markets and developing alternative product forms to maintain resilience. As the situation evolves, it will be crucial to stay informed on how these factors impact market dynamics. Keep an eye on future updates to gauge how the industry navigates these uncertain waters.
Authored by:
Liz Cuozzo
Expana
1-732-240-5330 ext. 272
[email protected]
