Coronavirus takes bite out of Clearwater's seafood sales to China

With the live lobster market currently halted in China, it comes as no surprise that North America's largest shellfish producer, Clearwater Seafoods,says the coronavirus has slowed the company's food service and restaurant sales.

"If anybody in the industry is telling you things are fine,clearly that is not the case. But the sky is not falling either," Clearwater Seafoods CEO Ian Smith told analysts this week.

The company was briefing the financial market on healthy sales results for the last three months of 2019before the outbreak hit China.

Live lobster sales in China are big business not only for Clearwater.

In the first 10 months of 2019, sales from Atlantic Canadian companies were$384 million.

Clearwater, based in Bedford, N.S., is warning of potential "headwinds" in 2020 because of the coronavirus, or COVID-19.

"The real question is what have the impacts already been and what are they likely to be going forward," Smith said.

Empty Chinese lobster tanks an opportunity

On the upside, he said all live lobster that was in China before the Chinese New Year, which iswhen the outbreak hit,has now been eaten or further processed.

Smith said when the markets resume, this represents a multimillion dollar export opportunity.

Restaurants in China have adapted by offering takeaway and delivery services, whiledemand has picked up for frozen products produced by Clearwater.

Smith saidretail and e-commerce sales in China are up so far this year, but not enough to offset lost food service business.

Clearwater has diverted live lobster to other areas while it monitors the impact of the outbreak in China and around the world.

The company has seen no disruption or change in order patterns from customers in Europe and North America, except for one exception: lower sales to Asian grocery storesand restaurants in North America, which is a small piece of its business.

Frozen seafood and agricultural exports to China

Clearwater also ships frozen products to China on container vessels,primarily Arctic surf clams caught off Cape Breton and Newfoundland.

Atlantic Canadian containerized exports to China are mostly frozen seafood and agricultureproducts.

Each week, between 100 and 200 containers from the Port of Halifax arrive in China, where some cargo has been stalled by the outbreak.

Nova Scotia Fisheries and Aquaculture Minister Keith Colwellsaidit's fortunate the cargo is frozen and not perishable.

'Jam up' at Chinese ports

The "jam up" in giant ports like Shanghai left shippers from Atlantic Canada with few options as port workers were either ordered to stay home or unable to go to work, saidYang Xue, a Halifax-based export consultant.

He predicts the bottleneck will end as Chinese people return to work and port staff work around the clockto clear backlogs.

"They are fully staffed. I think this will be resolved in the next week or two," he said.

St. John's-based Ocean Choice Internationalships frozen shrimp, sea cucumber, yellowtail flounder and redfish to China.

"We have shipped products to China since the coronavirus outbreak, and while we have experienced some delays associated with customs clearance and logistics once the shipments reach China, we have not experienced any major delays that have caused issues," saidspokesperson Cara Pike.

A spokesperson for frozen french fry maker Cavendish Farms, which is owned by J.D. Irving Ltd.,says the company "has not seen any delays/impacts to our export program due to coronavirus."

Clams on the move

Meanwhile at Clearwater, Smith saidcontainers shipped to China in December it takes 45 to 60 days to get there are moving from the port to their intended destinations.

"We continue to sell our products in China. In March alone, we are forecast to sell hundreds of thousands of pounds of new orders, not just for clams, but also for other species to our Chinese customers," he said.

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