For the first time the world's largest rock lobster exporter has put all deliveries on hold, as Lunar New Year celebrations are cancelled due to the coronavirus outbreak in China.

Key points: The Geraldton Fishermen's Co-operative has mandated a halt on deliveries as Chinese buyers cancel orders amid the coronavirus breakout

The Geraldton Fishermen's Co-operative has mandated a halt on deliveries as Chinese buyers cancel orders amid the coronavirus breakout Rock lobster prices plummeted overnight to $0 a kilogram — but WA locals aren't set to benefit from cheap crayfish prices

Rock lobster prices plummeted overnight to $0 a kilogram — but WA locals aren't set to benefit from cheap crayfish prices The industry, which has 11 months left to fill its quota, is not set to feel much impact at this point

Despite strong prices for western rock lobster earlier in the week, the Geraldton Fishermen's Co-operative — which controls more than 60 per cent of WA's rock lobster catch — mandated a halt to deliveries after a sharp drop in demand caused prices to fall dramatically.

Chinese New Year is a peak time for the fishery, with lobsters a main feature at banquets and celebrations.

Traditionally prices soar, but instead prices across the board were placed at zero dollars per kilogram as a signal that trading must stop.

Fishers praise Chinese response

In a statement, Geraldton Fishermen's Co-operative chief executive officer, Matt Rutter, said it is the first time the organisation has mandated a halt on deliveries.

"It has been encouraging to see that the Chinese Government's response to this outbreak has been decisive and swift," Mr Rutter said.

"So we remain optimistic that the situation will be contained and the impact on our markets will be short-lived."

The cooperative said the pause in supply was due to an unexpected and sharp drop in demand in what was normally a high demand holiday period.

It said lobster imports to China continue to flow, but further deliveries are suspended because at the current catch rates and present lower demand there was a risk that stocks would build, putting pressure on prices and the market.

While the prices have dropped, symbolically, to nothing, it will not necessarily mean locals will be able to access cheaper crayfish in Western Australia.

The cooperative told the ABC it is unlikely to have a noticeable impact on the local market, as lobsters can be stored in tanks in the right conditions for many weeks at a time.

While in Tasmania, hundreds of fresh rock lobsters are being sold on social media for about $50 direct from fishermen.

Geraldton cray fisherman Justin Pirrottina said he had never been told to not bring crayfish in. ( ABC Midwest and Wheatbelt: Laura Meachim )

'Good call', but market reliance questions raised

Before the decision was made, it was all systems go in the WA's Midwest, with H-grade rock lobsters — the larger size most popular with Chinese buyers — reaching a record price on Tuesday at $105 a kilogram.

Geraldton fisherman Justin Pirrottina said the freeze was unexpected with demand so high earlier in the week, but he said as long the halt does not last more than a week, it should not have a big impact.

"We've never been told not to bring in our crays," he said.

"But I mean the co-op has to be cautious, we don't want them to have a whole factory full of crayfish and then not be able to get rid of them.

"At the end of the day, as shareholders we will have to pay for that, so yeah — it was probably a good call on their behalf."

With 97 per cent of the cooperative's catch exported to China, Mr Pirrottina said the situation has brought up concerns about relying on one customer.

"This sort of thing brings it to the forefront," he said.

"There are just no other markets at the moment that are willing to pay what China wants to pay."

The Geraldton Fishermen's Co-operative have never mandated a halt in deliveries before today. ( ABC Midwest and Wheatbelt: Laura Meachim )

Fisheries minister praises sensible decision

Acting Fisheries Minister David Templeman praised the cooperative for taking such precautions.

"The important thing is this is a decision that has been made by the co-op itself and they are autonomous in that respect," he said.

"The industry is a very important one to Western Australia and they have their reasons in regards to the decision.

"The full impacts, of course, will really depend on how long this virus remains a world health concern."

Mr Templeman said at this stage in the year, the industry should not be impacted negatively.

"The lobster industry in WA is managed by quotas, the quota year has only recently begun and there are still some 11 months for the quotas to be reached," he said.

"I would be hopeful, as many others are, that this virus will be addressed, and indeed the impacts and spread will be contained, and then we will return back to normal market processes."

Mr Templeman said it is not yet known how other export industries will be impacted, but another concern is tourism.

"It is the Chinese New Year celebrations and Chinese travel is very, very strong and there are potential impacts on events and possibly other exports," he said.

"So there are ramifications and considerations to be taken into account.