That’s why the price of crab is skyrocketing

Since last week, fishmongers across Quebec have received their first shipments of snow crab of the season, and the price has been surprising. Last year, fish shops in Rimouski set a price of $55/kg(New window) ($24.95/lb) for cooked snow crab and $26.34/kg ($11.95/lb) for live crab. This spring, snow crab(New window) cooked crab sells for $63.93-$72.75/kg ($29-$33/lb), while live crab fetches $30.86. US/kg ($14/lb) at Rimouski locations.

Today, the Institute for Research in Contemporary Economics (IREC) publishes a research report(New window) on the mechanisms and economic issues responsible for snow crab prices. In partnership with the Manger notre Saint-Laurent collective, IREC explores the fluctuations the industry has undergone from its inception in 1968 to the present day.

Its co-author, IREC researcher Gabriel Bourgot-Fochet, agreed to answer our questions.

How to explain the rise in prices this year?

We must look to international markets to understand this growth. In 2015, global landings of crabs of the genus Chionoecetes, also known as snow crabs, peaked at 253,346 tons. Since then, the total supply has been decreasing every year.

From 2010 to 2021, the landed price more than quadrupled from $3.97. USD/kg up to USD 16.30. USD/kg (from USD 1.8/lb to USD 7.39/lb) after an average annual growth of 14%. This is exactly what the fishermen are asking for.

The collapse of Alaska’s fisheries partly explains this rise in prices. From 2010 to 2020, landings from the US state accounted for approximately 10% of the world volume. However, overfishing and global warming have affected this market so much that the US government has cut the quota by 88% in 2022.

Thus, 10% of the total supply is reduced. The lack of crab in Alaska caused prices to rise in the United States and, as a result, the prices demanded by fishermen and women in Quebec.

Snow crab landing at Rimouski Pier | Photo: Radio-Canada / Francois Gagnon

Due to the conflict in Ukraine, US President Joe Biden banned the import of Russian seafood amid economic sanctions against Russia. The latter accounts for 17 to 18% of the world crab catch. These products become unavailable on the market.

In total, about 30% of the world’s supply will not reach the markets compared to last year. This creates a huge vacuum as demand remains high and relatively stable. The United States and Japan remain the two main importers in this industry.

Why are snow crabs caught in Quebec primarily sold abroad?

The pattern of development has essentially remained the same since the first commercial fishermen came from Europe to exploit the cod beds. The fisheries of Quebec and Canada have always developed as follows: We extract, pack and export.

In other parts of the Canadian economy, this pattern persists. We can think of wheat, wood or oil. Regardless of the resource, the approach remains the same. However, species harvesting conditions have changed more preemptively, especially in response to declining stocks of demersal fish such as cod. The model remains typically Canadian.

Snow crab pot. | Photo: Radio-Canada / Nicolas Steinbach

The conditions of success or failure are determined by foreign economic and political circumstances. Right now, we can take the example of an American law that threatens Quebec’s fisheries. Foreign legislation affects the conditions of business here. The Marine Mammal Protection Act (MMPA) requires the fishing industry in the United States or other countries to take measures to protect marine mammals. The US government is asking Canadian fisheries, particularly crab, to apply its rules to gain access to the US market. Its entry into force is scheduled for 2023.(New window).

What are the long-term challenges for harvesters and processors?

First, it is environmental sustainability. How much more can you expect to catch a crab? This element of surprise remains the main minor factor plaguing the industry.

An example that should not be followed is, of course, Alaska. At the intersection of overfishing and warming waters, we’re beginning to wonder where the crab has gone. What is happening is dramatic. We are witnessing an industry that has almost completely collapsed. This scenario is quite likely elsewhere.

These climate issues remain at the forefront of the Atlantic. 2019 Report of the Standing Committee on Fisheries and Oceans(New window) reveals the risks associated with the industry’s dependence on two main resources, crabs and lobsters. Single-species fishing is not the way to ensure the sustainability of the sector. Climate change threatens these species and may affect their geographic distribution.

Does this industry contribute to local food security?

The economic model is still based on exports, and therefore not very nutritious for the population of Quebec. From a food point of view, the resources in the exploited territories are very difficult to access. On the economic side, the desired benefits for regional communities remain minimal.

Fishermen prepare to throw their first tackle into the water. | Photo: Radio-Canada / Sebastien Ross

This sectoral approach is focused only on the development of this branch of the economy, and not on regional and territorial development. This is the industrialization of fishing.

We want to facilitate the growth of players in this sector with the existing regulatory framework that is conducive to exports. At the same time, we observe the devitalization of communities.

How can we ensure people have better access to these Quebec products?

We see consumers asking for these products. Therefore, product promotion is not the most important approach. On the contrary, we must make these products available.

Government policies and regulations encourage Quebec fisheries to export their landed fish. It is important to introduce a model based on food self-sufficiency. This is really a social project. State intervention is now on the agenda.

The study proposes the creation of a fisheries diversification fund(New window) aimed at providing the sector with the necessary financial leverage to overcome the economic and environmental hazards that will arise.

We will then consider the creation of an integrated mechanism for resource allocation and price stabilization in the Quebec market. This would include the adoption of one or more integrated mechanisms to reserve and allocate a share of the catch to Quebec markets, as well as stabilizing the price of snow crab sold in Quebec.

Some answers have been edited for clarity.

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