A stronger Canadian dollar and a sluggish United States economy are the two main causes of lower lobster prices this spring. That’s the finding of a lobster market assessment report released today by Fisheries, Aquaculture and Rural Development Minister Allan Campbell. The report was prepared at the request of the minister by John Sackton, editor and publisher of Seafoodnews.com, a Massachusetts based fisheries publication.
The report notes that the U.S. market accounts for 80 percent of the sales of Prince Edward Island lobsters, and this is the reason why the U.S. currency and market pricing are the single most important factors in determining lobster prices. It says that the weakening of the U.S. economy has made lobster products more difficult to sell, and that attempts to raise prices would lead to dramatically lower sales. Increases in the Canadian dollar over the past year have meant that exporters are receiving 15 percent less than they did in the spring of 2007.
“This report confirms what many people in the industry have been saying, and will give us a clearer picture of where to focus our efforts,” said Mr. Campbell. “I look forward to discussing the findings of the report with the Prince Edward Island Fishermen’s Association, the Seafood Processors Association and my colleagues in the provincial government.”
The report says that heavy landings during some times of the season have led processors to producing lower value products which are faster to process but which lead to lower returns. It also says that the structure of the lobster market is fragmented, which means that traders and brokers are forced to sell products for what the market can bear. Mr. Campbell said he will be referring these and other findings to the new Lobster Roundtable which is now being established. The roundtable will include all sectors of the lobster industry, along with representatives of the federal and provincial governments and the scientific community.
“There is a need to develop mechanisms to promote increased cooperation among fishers, processors and the marketplace,” said Mr. Campbell. “We need to ensure that all sectors of the lobster industry become more sustainable and profitable.”
The report says that although 2008 prices are lower than the past two years, when currency changes are taken into account, prices this spring are the third highest in the past eight years. It also found that there is no sign of a current buildup of most inventories. It predicts the market does not appear at this time to be facing any dramatic downward adjustment over the next 12 months, and may in fact see some recovery.