Can Yunnan drought justify increased Pu-erh prices in 2013?
Since Autumn 2009, South Western China has seen a lack of precipitation and high temperatures, which created a drought. Nowadays, the situation is still worrying.
Even though the drought has had a severe impact on tea production, despite irregular consumption, the price increase has not impacted the demand.
According to statistics, Yunnan tea represents 13% of the Chinese tea production, 25 to 30% if we only consider Spring tea. The Yunnan Agricultural Department estimates that, in 2010, the drought reduced production by 50% overall and by about 60% for Spring tea. As a consequence of the drought, the price of tea last year increased by 20% on average, and up to 70% in some villages.
As a result, Pu-erh tea does not even account for 4% of the total Chinese production nowadays, yet, the Pu-erh stock remains large (two thirds of the Pu-erh tea is stored in Dongguan, near Guangzhou), therefore, the drought should not have an influence on the supply.
In China, the consumption should continue to increase and the prices do the same: Pu-erh tea will surely be more expensive in 2013. Still, will the farmers get out of poverty? Will the tea shops make money? I think the Yunnan drought has been around for years, can it still be used as an argument to justify higher prices?