Fir Trade Chinese Demand Sends Christmas Tree Prices Soaring

A combination of rising Chinese demand and the biofuel boom is pushing up Christmas tree prices in Germany. Producers say they just can't keep up with demand from Asia's economic giant.

The Christmas tree may be a quintessential symbol of Christmas, but it's also a natural resource. And, like other natural resources, it is subject to market forces -- forces which are pushing up prices in Germany.

According to the German timber industry's umbrella organization, the HDH, tree prices have risen by 20 percent this year, with the average tree now costing between €24 and €28. Demand for Christmas trees is rising due to increasing exports and the growing number of single-person households, the HDH says. Meanwhile the supply of trees has decreased because several thousand hectares of tree plantations in Germany have been given over to more profitable uses, such as lucrative biofuel crops.

The Nordmann fir is proving particularly popular with the export market. The airline Lufthansa is already flying trees to Abu Dhabi and Dubai, while freshly felled trees are being transported in refrigerated containers to China. A Christmas tree decked out in the American style has become a status symbol in China, and many retail stores there are adopting the tradition.

"We don't have enough goods to keep up with Chinese demand," says Christian von Burgsdorff, who runs a Christmas tree company in the northern state of Schleswig-Holstein. Around 28 million Christmas trees were sold last year in Germany, the highest figure on record. The HDH expects sales to hit 28.3 million in 2007, an increase of around 300,000 trees over 2006.

The Christmas tree is just the latest crop to be affected by the twin factors of the biofuel boom and increased Chinese demand. Prices of milk and other dairy products -- not to mention chocolate -- have increased in Germany in response to Chinese demand, while rising biofuel production has pushed up the prices of foodstuffs such as beer, pasta and even gummy bears.



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