If I told you that I was thinking about investing in a product classified by year and region of production you would probably think that I was contemplating fine wines or spirits, however on this occasion it is not the case.
Pu-erh tea is grown in Southwest China and the bordering Burma, Vietnam and Laos. It is a product steeped in history and even the great Chinese cultural revolution did not stop it being a coveted and highly valued product.
There has always been a value attached to an aged Pu-erh tea, and it was often the case that a poor man would buy a pressed cake of fresh Pu-erh on the birth of a daughter in the knowledge that the same cake would be of significant value as a dowry upon her marriage.
While most Pu-erh tea lovers would never dream of selling their prized collections the escalating price of Pu-erh tea has attracted many investors and opportunists. In China's supercharged economy, where no investment opportunity goes unnoticed the idea of investing in tea is not just a novel idea but an increasingly popular trend followed by many affluent young professionals.
For the better part of a decade the price of Pu-erh tea has risen each year, averaging a rough estimate of 10% annually.
For premium production consisting of wild tea leaves or leaves from old tea trees gathered from famous regions such as Yiwu this markup is progressively higher with prices jumping between 30-80% in 2006, obviously a good year for tea. The aged tea sector has produced the biggest gains of all. Prices for certain vintages have sky rocketed, some easily multiplying by as much as 10 times within the span of a few years. A noticeable example is the price of the famous 1950s Red Label (Hong yin). One piece of this famous teacake weighing approximately 357grams was once valued at US$1200 in 2003, US$5,000 in 2006 and to almost US$6,800 in 2008 at retail outlets in Hong Kong.
In summary the market growth for Pu-erh tea has been outstanding for the past decade. A repeat of this level of growth for the next decade will likely see collectors and investors sitting on a goldmine.
As the main market for Pu-erh tea is China, the sustainability and growth of the Pu-erh tea market will largely coincide with the future development and growth of the Chinese economy.
Pu-erh tea can be purchased in a variety of forms:
White Pu-erh tea is made entirely from the uppermost tender buds of the tea plant. The highest quality buds are gathered exclusively by hand in the spring. These large, succulent buds are highly valued and only a limited production can be made each year.
Green Pu-erh is an aged tea from Yunnan Province and is one of the oldest teas in China with a history of over 1700 years. Its character and complexity makes green Pu-erh one of the most popular Chinese teas amongst tea connoisseurs. Premium aged green Pu-erh tea can be as old as 20 or even 50+ years. Such teas are highly valuable commodities and are worth their weight in gold, often more.
Black (microbe-ripened) Pu-erh tea has been produced for centuries but only since the 1970’s has it gained in popularity. During this relatively short period of time black Pu-erh has easily become the most consumed type of Pu-erh tea in China
All of the above types of Pu-erh can also be purchased in a variety of shapes and sizes:
* Mushroom - Literally meaning "tight tea," the tea is shaped much like
túocha, but with a stem rather than a convex hollow. This makes them
quite similar in form to a mushroom.
* Bing - A pressed flat round disk of tea approx 400g per cake, usually sold in batches of seven.
* Bowl - (no image) A convex knob-shaped tea with size ranging from 3g to 3 kg or more, with 100g, 250g, 500g being the most common. The larger sizes used to be molded with a hole in the middle so that they could be transported on a staff.
* Melon - A shape similar to tuóchá, but larger in size with a much
thicker body that is decorated with pumpkin-like "stripes". This shape
was created for the famous "Tribute tea" that was made expressly for
the Qing Dynasty Emperors from the best tea leaves of Yiwu Mountain.
* Square - A flat square of tea, usually in 100g or 200g sizes. They often contain words that are pressed into the square
* Brick - A thick rectangular block of tea, usually in 100g, 250g, 500g, and 1000g sizes. Zhuancha bricks are the traditional shape that was used for ease of transport along the Ancient tea route by horse caravans.
While the increasing demand and popularity points to a bright future, a note of caution, not all Pu-erh tea will appreciate in value. Much of the Pu-erh teas flooding the markets today are fakes and low quality teas. It is unfortunate but the precedence for increasing Pu-erh production has greatly compromised the quality of tea in recent years.
While the production of Pu-erh tea continues to increase annually, the quality has substantially dropped with recent outputs being most disappointing. The knock on effect has been a sharp increase in the price of older vintages. The pursuit of Pu-erh tea is best done with caution. Ignorance can be costly to a naïve investor.
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