NZ crayfish prices slump as live export trade to China stops

Crayfish, otherwise known as rock lobster, have fallen in price to around $80 a kg, down from their usual market price of around $130 a kg. Photo / File

Crayfish prices have slumped after the lucrative export trade to China stopped dead in its tracks following the outbreak of the deadly coronavirus.

The outbreak has had a swift impact on New Zealand's primary sector.

Crayfish, otherwise known as rock lobster, have fallen in price to around $80 a kg, down from their usual market price of around $130 a kg, as previously export-bound product finds its way onto the domestic market.

The outbreak has also meant some meatworks have had to curtail production.

For both industries, the timing could not have been worse.

China is by far the biggest market for live New Zealand crayfish and the Chinese New Year period, which started on Friday, is a time of peak demand.

The Chinese authorities have imposed restrictions on transport and public gatherings and activities to try and prevent the transmission of the disease and limit fatalities.

Taine Randall, chief executive of Takitimu Seafood and a director of New Zealand's biggest live lobster exporter - the Fiordland Lobster Company - said fishermen could normally expect to receive $90 to $100 kg for crayfish and processors would onsell live product for about $120/kg to $140/kg.

"But what has happened is the Chinese have stopped buying, so the price has fallen to about $80/kg," he told the Herald.

Crayfish can remain alive in tanks for two to three weeks after capture.

"The big uncertainty around this is how long the coronavirus has got to run, and how long are they going to remain in lockdown," Randall said.

Finance Minister Grant Robertson told the Herald he had asked Treasury to monitor the situation, along with the impact of the outbreak on other specific sectors. It was still too early to assess the broader economic impacts, he said.

Mark Edwards, chief executive of Rock Lobster Industry Council, said exports of live lobsters from New Zealand had stopped.

"For New Zealand exporters, the timing is unfortunate because this is a peak period for demand and good prices over the Chinese New Year," he said.

Edwards said lobsters that had been harvested were in facilities designed to keep the crustaceans in top condition prior to export.

The rock lobster industry is worth around $320 million annually. It uses about 250 vessels and employs around 2,500 people directly and indirectly.

"There are very significant economic impacts if solutions cannot be found," Edwards said.

Edwards said the industry was carefully considering its options.

The council is talking with Fisheries New Zealand - part of the Ministry for Primary Industries - about steps that could be taken to help mitigate the economic impact of China's absence from the market.

"The discussions with government have been constructive, and although the issues are complex, we are hopeful of a good outcome," he said.

Randall, in an interview NZME's The Country radio programme, said the primary sector was in for a shock.

"Talk about issues ... there are massive issues for the seafood industry and for the meat industry - you name it - this coronavirus is causing problems all over this space for agricultural production," Randall, a former All Black captain, said.

"Chinese New Year started last Friday and in anticipation of that, every lobster company in New Zealand would have loaded their tanks to supply that market," he said.

"There are going to be losses around at it's not going to be good," he said.

Silver Fern Farms, New Zealand's biggest meat processor and exporter, with sales last year worth $2.4 billion, said production at some of its plants had been curtailed due to the outbreak.

Chief executive Simon Limmer told The Country that the situation was changing quickly.

Limmer noted that Chinese Government had extended the holiday period to February 2.

"That's put a bit of pressure on capacity through the ports, so a lot of customers have asked us to hold off a little bit in some of the shipments until greater certainty emerged."

Limmer said Silver Fern had told suppliers that if the backlog started to build, that would have an impact on storage capacity, processing plants and on farmers.

At around this time of year, meatworks are busy processing mutton - most of it destined for China.

"It's fair to say that in the last 24 hours we have looked at where the bottlenecks are," he said.

"We have heard that there is a bit of pinch point with Chinese ports at the moment.

"That flows back into our ability to hold product onshore before we ship it.

"Whatever the pinch point may be, it's going to affect our ability to get product through the processing plants, so we have backed off a little bit at the moment" Limmer said.

"But it is evolving on a daily basis."