ASEAN nations seize opportunity as China expands lobster sources amid prolonged Australian ban

As China seeks alternative sources to meet its voracious lobster demand, ASEAN nations are stepping in to fill the void. From the time Beijing banned lobster imports from Australia doors for the lobsters of Indonesia, Thailand, and Vietnam to enter China have opened wider.

Southeast Asian countries are ramping up efforts to secure a larger share of the lucrative market, seizing opportunities created by Beijing’s prolonged ban on Australian rock lobsters. Analysts expect that this trend will not only persist but may intensify, making it increasingly challenging to reverse as the ban on Australian imports remains in effect.

The latest data from the General Administration of Customs reveals a notable shift in China’s major sources of rock lobsters. New Zealand is now the primary supplier, capturing almost 40 per cent of the total market share. Following closely are Mexico and the United States, contributing 20 per cent and 16 per cent, respectively.

Three prominent members of the Association of Southeast Asian Nations (ASEAN) – Indonesia, Thailand, and Vietnam – are strategically positioning themselves to capitalize on China’s accelerating demand for crustaceans, particularly during the 2010s when the middle class expanded exponentially. These nations are now directing their efforts toward rising market share, leveraging their proximity and understanding of regional tastes to tap into China’s robust lobster market.

As China seeks alternative sources to meet its voracious lobster demand, ASEAN nations are stepping in to fill the void. From the time Beijing banned lobster imports from Australia in conjunction with the calls from Canberra for an inquiry into the origin of the pandemic coronavirus, doors for the lobsters of Indonesia, Thailand, and Vietnam to enter China have opened wider. Last year, the three members of the Association of Southeast Asian Nations (ASEAN) accounted for almost 6.8 per cent which is double the rate from the year 2019. To buffer geopolitical complications with the U.S.-led West is one of the reasons that Beijing has been growing closer to its Southeast Asian neighbours.

According to the customs data, the fifth largest lobster exported to China is Indonesia, with the value of shipments reaching nearly US$18.27 million in the year 2023. That accounts to be nearly 44 percent, year on year, and also accounting for 2.9 percent of the market share. The data also states that the seventh biggest importer of seafood of China is Thailand, as the lobster shipments have risen 160-fold since 2019, from a total value of US$88,123 to US$14.1 Million the previous year, or a 2.2 per cent market share.

Song Seng Wun, an economic consultant with CGS CIMB Securities, a financial services firm in Singapore stated, “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.” The economic consultant with CGS CIMB Securities also asserted that because of the ban large amounts of lobsters from Australia have become more affordable for ASEAN consumers. Meanwhile last year, China’s lobster imports from Vietnam fell tragically which was once used to rank as the eighth biggest source. It dropped from 39 per cent of the total in the year 2022 to almost 1.7 per cent last year.

Song added by saying that the lobster industry of Vietnam lacked the same well-established farming procedures and regulations as that of Australia and some farmers fish for wild lobsters – a clear violation of the animal protection laws of China. “This is why last year China banned many imports of Vietnamese lobsters”, said Song.

Before the ban was imposed, the rock lobster import of China was above US$900 million in the three years but this has dropped to almost US$600 million since 2021. Official figures say that the lobster import from China was US$629 million last year, down by 31 per cent from 2020.

Jayant Menon, who is a senior fellow at the ISEAS – Yusof Ishak Institute in Singapore said, “Unless this mini trade war is resolved soon, there could be irreversible changes that will negatively impact Australian lobster exporters.”