Original article: http://www.puercn.com/puerchanews/news/13247.html
published on 2012-03-08 on www.puercn.com 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.