Christmas is still eight months away, but artificial tree maker Lou Liping is already worried about a bad holiday season due to the Iran war.
Lou’s company, Kitty Christmas Factory, has been making artificial trees for the U.S. and European markets for nearly three decades. Her facility is based in the city of Yiwu, known as China’s Christmas capital.
“Many customers ... are holding off on orders,” she told CNBC last Friday at her showroom in the city’s international expo center. The center houses hundreds of manufacturers that contribute to the country’s vast production of the world’s artificial trees, tinsel, ornaments and other decorations.
An estimated 87% of Christmas decor sold in the U.S. is sourced from China, according to the American Christmas Tree Association, with much of it from Yiwu.
Lou said the disrupted shipping in the Strait of Hormuz and high oil prices due to the Iran conflict have raised her costs per tree by 10%. The base material of her trees is PET plastic derived from oil. The price of the PET in her artificial pine needles is up 5%, and the cost of the plastic used as packaging for shipments is up 15%, she said.
