OPINION: The new year has started on an optimistic note for WA’s rock lobster industry, with fishers now free to resume live lobster exports to China for the first time in four years.
The new year has started on an optimistic note for Western Australia’s rock lobster industry, with fishers now free to resume live lobster exports to China for the first time in four years.
Following negotiations with Prime Minister Anthony Albanese over the past year, the Chinese government has lifted the last of the import restrictions imposed in 2020 on a range of Australian goods, including wine, beef, barley and lobster.
WA’s rock lobster industry was worth about $500 million before Chinese trade sanctions kicked in from 2020, and the state was Australia’s biggest supplier of lobster to China.
More than 90 per cent of WA’s lobster exports – 5,500 tonnes, worth $453 million, went to China in 2018-19, accounting for 63 per cent of Australia’s total $720 million in lobster exports to that country.
China’s trade embargo cut WA’s lobster industry in two, with exports falling to $276 million in 2022-23.
The same was true for Australia overall, with exports dropping from $750 million in 2018-19 to $412 million in 2022-23. WA’s lobster industry has been able to pivot better than most, its share of national exports of crustaceans, principally lobster, having risen from half to two thirds since sanctions were introduced.
The reversal of the trade embargo with China is a welcome fillip for the state’s lobster industry, especially in regional areas, and comes on the back of China lifting other trade restrictions on wine, barley and beef.
But the value of WA’s lobster trade with China won’t snap back to pre-embargo levels, at least not over the shorter term.
It will take some time to rebuild trade connections with Chinese buyers, with WA’s lobster businesses having developed markets in Europe, the United States and especially South-East Asia in response to the trade sanctions imposed by China.
And although there is no official line on this, it is an open secret Chinese consumers have been enjoying WA-sourced rock lobster through indirect trade routes via Hong Kong, Vietnam and Taiwan over the course of the embargo.
The largest of these trade partners, Hong Kong, has seen imports of WA crustaceans, principally rock lobster, rise from $10 million in 2019-20 to $169 million in 2023-24.
Vietnam was the principal export partner for the WA lobster industry in the years before Australia struck a trade deal with China to cut import tariffs.
It’s hard to imagine the level of exports to Hong Kong, Vietnam and Taiwan, collectively worth about $270 million in 2023-24, staying at the same level now that import restrictions with China have been lifted.
Neither can we expect lobster to fetch the same prices that were being paid before the import ban.
China’s domestic economy is significantly cooler now, and Chinese households are facing stronger cost of living pressures.
I suspect there may be a degree of caution among WA’s lobster businesses now that Chinese trade sanctions have been lifted, and a desire to maintain diversified export markets.
Once bitten, twice shy, if you like.
And, of course, the relevance of the lobster industry as a case study to inform the broader geopolitical narrative should not be lost, with US president Donald Trump casting around threats of import tariffs as you would lobster pots into the sea.
• Professor Alan Duncan is Director of the Bankwest Curtin Economics Centre at Curtin University
