Saturday, March 10, 2012

price of Pu-erh tea in 2012

    published on 2012-03-08 on a main platform for Pu-erh tea in mainland China.
    written by isundust

Yunnan drought and insights on the price of Pu-erh tea

After a time of stability, the price of Pu-erh tea is starting to move. Our journalists traveled to Xiamen (a city in Fujian) and visited several tea shops to ''test the water''. Because of the drought, the production is lower, the new tea doesn't arrive on the markets, the tea farmers are reluctant to sell the leaves, the price for Pu-erh tea is already increasing. Yet, the experts think the increase will mostly affect the ancient tea gardens leaves from the most famous mountains, it will have few impact on the mainstream tea, the 2007 situation of mad speculation is unlikely to happen again.

Production decreased two-three fold:

''The drought will surely affect tea production'' says Mr Huang, an experienced tea businessman from the Huang Pin Hao tea house. He told to our reporters that, because of the drought, the 2012 spring tea good be released in mid-April at earliest, this is two weeks later than last year's harvest. Even worse, this year's production is estimated to be two or three times lower as 2011. ''This implies that the price of Pu-erh tea will increase''

In 2009, Pu-erh tea price increased because of the drought, it recovered slightly in 2010 and in 2011, it increased again. This year, it will be a bit higher for sure.

''Last year, the price of Lao Banzhang tea peaked at 2200-2300 yuan per kilo, this year, it is expected to reach 2800 or 3000 yuan.'' says mr Huang

A speculation frenzy is not very probable this year.
Because of this expected price increase, the tea farmers are reluctant to sell their tea now.
''During the high price periods, the farmers usually release their stock slowly: if they have 100 kg of mao cha, they first sell only 10 kg, then the price increases and they can sell another small batch.'' says the tea expert.

''Nonetheless, a ten-fold increase like in 2007 is very unlikely to happen.'' Mr Huang tells us. On that year, it occurred because a lot of new investments were brought into the system, it led to a crazy speculation on Pu-erh tea. Today, the market is reasonable again, during the price peak in 2007, those who bought the tea were rich investors, nowadays, the main driving force of the market is the mid and low range teas for the everyday drinker, very few people would buy tons of Pu-erh as a financial investment nowadays. Therefore, the tea amateurs might accept to pay an extra cost because of the drought, but a new frenzy is not expected.

According to the tea businessman, the price increase will concern mainly high-end Pu-erh: Lao Banzhang, Bingdao, Mahei, Jingmai Shan, Kunlu Shan, etc... Those areas have very limited productions, and many people who buy from those mountains see it as an investment, hence the price increase will be more obvious on those premium teas. In comparison, the output of low and mid range cakes is much higher, and this is what the consumers buy mostly, so even if the trend is to the price rise, the market should not be too much affected.


  1. Thanks for sharing William. I'm hearing the same thing from my friends in Yunnan. The farmers are reluctant to sell their early spring material because the harvest is less than normal and they expect the price to go up with each passing week.

    But contrary to this article's author, I think there's more rich Chinese investing in Puer than ever. I hope it won't reach fever pitch like 2007 again...

  2. I hope not either, but first, I think now that so many people have lost their money in 2007, the new investors should be more cautious. It seems the Pu-erh tea market is slowly developing in Northern China and abroad. But from what I understand, the main reason for the price increase is a lower supply this year, not a huge increase in demand.

    Another crucial parameter for high quality tea is the rain; last year, it arrived soon in the Spring season and that lowered the price and the quality a lot.

    Pu-erh tea is a really interesting market :)

  3. thx William for this article, ill have it shared on my FB
    many people are greatful for such information

    although the article begins:
    "After a time of stability, the price of Pu-erh tea is starting to move."
    I dont think the last two years there were out stabilized prices for gushu leaves, they are rather rinsing spring to autumn and the next spring even higher.

  4. Thanks for sharing Peter!

    Here, the author talks in a short term perspective, the price of Pu-erh is quite stable during the winter, and as the harvest starts, the price can change quite dramatically: the tea whole sellers update the prices of their teas, people speculate, they wonder about the weather, the trends...

    I wouldn't say autumn tea is more expensive than same year's spring, at least to my knowledge. Of course, there can be exceptions, in 2011, the rain came early in Spring and that made the price fall, on the other hand, the Autumn was quite dry and gave good teas which could be sold for a high price. Especially in the Yiwu area, autumn tea is really praised and comparatively more expensive than in other mountains.

    Early Spring tea, before the rain come, still remains the most expensive tea of the year.