Australia Faces Lobster Glut After China Stops Imports

Tons of Australian rock lobster are landing on the tables of the country’s finest restaurants after China stopped imports as part of a crackdown on shipments via Hong Kong to avoid duties.

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China and Hong Kong account for almost 80 per cent – A$400m (US$396m) – of Australia’s annual exports of rock lobster and the unexpected ban could not have come at a worse time.

Australian fishermen are in the midst of the lobster season and the ban has provoked an industry outcry with complaints that Canberra has failed to secure preferential trade deals with China negotiated by rival nations such as New Zealand.

The Australian authorities want the matter to go away, and quickly, given that it shines a light on the long-standing practice that sees the bulk of Australian lobster supplies entering China via Hong Kong.

But Patricia Fung, a director of Flower Drum, an upmarket Cantonese restaurant favored by Melbourne’s establishment clique, is not complaining. “We sell lobster all year round but at the moment we can get it cheaper,” she said.

Crayfish prices have dropped from A$120 a kilo in October to A$55, she says, and that means “market prices” charged by Flower Drum have fallen from A$240 a kilo to A$165.

But Steve Vasiliki, owner of a family-run seafood wholesaler on Melbourne’s outskirts, is less happy. He and rival wholesalers are trying to stockpile lobster in the hope that their biggest export market opens up again soon.

“We are holding live lobster that we paid a premium for. My wholesale price has not changed and it won’t – otherwise I will go under,” said Mr Vasiliki.

“Prices won’t drop any more because the fishermen have overheads and they can’t afford to go fishing at these prices.”

Steve Moriarty, owner of Southern Waters Marine Products, a South Australian seafood exporter, said that Australian producers had to pay a 35 per cent duty on top of the agreed lobster sale price when they exported straight to China. The Australian government needed to exert diplomatic pressure to protect the local industry, he said.

“China has recognized value in Australian lobster more than anyone. They call it the spiny dragon and they will pay a lot for it,” he said. “I want things back to normal.”

If Australia hits an extended period of lobster oversupply, he warned, many in the industry will go out of business.