Southeast Asia capitalises on China’s Australian lobster ban

The protracted ban on Australian rock lobsters by Beijing has prompted Southeast Asian countries to capitalise on the opportunity, increasing their seafood exports to China. As the ban continues, the shift in sourcing may become irreversible, experts predict.

New Zealand currently dominates the Chinese market for rock lobsters, holding nearly 40% of the total market share, based on data from the General Administration of Customs. Mexico and the United States follow, accounting for 20% and 16%, respectively.

However, three ASEAN members – Indonesia, Thailand, and Vietnam – have taken advantage of the burgeoning demand for crustaceans in China over the past decade. The ban on Australian lobster imports in response to Canberra’s call for an inquiry into the origins of the coronavirus has only widened the door for Southeast Asian exporters.

These three ASEAN countries accounted for 6.8% of China’s total import share in 2023, double the rate of 2019. The shift aligns with Beijing’s strategic move towards its Southeast Asian neighbours amid escalating geopolitical tensions with the West.

Indonesia ranked as China’s fifth-largest lobster exporter, with the value of shipments reaching US$18.27 million in 2023, a rise of nearly 44% year-on-year. In contrast, Thailand saw a massive 160-fold increase in its lobster shipments since 2019, reaching US$14.1 million last year, said Song Seng Wun, an economic consultant with CGS CIMB Securities in Singapore.

“China is a major consumer market, and Australia’s withdrawal gives seafood exporters within the [Southeast Asian] region vast opportunities to target this seafood market.”

However, Vietnam saw a significant drop in its lobster exports to China last year, from nearly 39% of the total in 2022 to 1.7% in 2023. Song attributes this decrease to Vietnam’s lack of established farming procedures and regulations, leading to a ban on many of its lobster imports.

Despite Southeast Asian countries and the US seizing the opportunity opened by Australia’s exit, the gap left by Beijing’s blockade on Australia remains significant. The value of China’s rock lobster imports has dropped to around US$600 million since 2021, down from over US$900 million in the three years prior.

The recent lifting of China’s trade ban on Australian coal-fueled speculation that Australian lobsters might be readmitted. Yet Jayant Menon, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore, warns of irreversible changes that may affect Australian lobster exporters negatively if the trade conflict continues.

Australia remains hopeful about the resumption of its lobster exports to China. James Clarke, president of the Australia China Business Council (West Australia), emphasises that premium Australian products offer exceptional quality and value for Chinese consumers. The council has even written a formal letter to the Australian prime minister, advocating for the restoration of the live lobster trade to China, reported Bangkok Post.