![]() ![]() Pu-erh
Tea
Article - The Captivation of Pu-erh Tea
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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. This markup is progressively
higher for premium productions consisting of wild leaves or leaves from
old tea trees from famous regions such as Ban Zhang and Yiwu, prices
have jumped by as much as 200% in 2007 alone. 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 10X times within
the span of a few years (see Pu-erh
Tea News to read more on investment trends).
In summary the market growth for
Pu-erh tea has been for the past decade outstanding. A repeat of this
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 be dependent on the
future development and growth of the Chinese economy.
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Aged
tea prices have sky rocketed. The price of the famous 1950s Red
Label (Hong Yin) have jumped from US$1200 in 2003 to upwards of
US$10,000 in 2007 at retail outlets in Hong Kong.
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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 (see Detecting
Bad Pu-erh Tea). It is unfortunate but the mass production of Pu-erh
in recent years has greatly compromised the quality of tea. A lack of
quality control and greed has lead to an
emerging dilemma that has seen quality substantially dropped with
noticeable outputs from 2005 to 2007 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.
Note: Pricing information and opinions
on market trends are based on informal discussions with tea merchants
at various trading locations. The prices should be taken as a rough
estimate only and the accuracy may vary accordingly. All investments
are a risk.
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