Pu-erh Tea Article - The Captivation of Pu-erh Tea (3)	Page 1 | 2 | 3

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.

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.

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.