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 collection, 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. For the better part of a decade from 1997 to 2007 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 sourcing leaves from the few remaining ancient tea trees of famous regions such as Ban Zhang and Yiwu. However it is the aged tea sector that has produced the biggest gains of all with certain vintages multiplying by as much as 10X times within the span of a few years. 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 multiplied. 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.

UPDATE: While Puerh tea prices have sky rocketed during the golden decade (1997-2007), 2008 have brought a measure of reality back to the markets. Novice dealers and factories holding onto and churning out mass productions of at best average teas have been hit hard with plummeting prices as a growing number of educated consumers have come to recognize teas with questionable quality. Puerh tea sourced from common plantation leaves which account for over 80% of annual productions have seen their retail price more than halved in 2008. Comparatively the high end of the Puerh market remains relatively stable. While the prices for high quality leaves gathered from ancient tea trees have been slightly lowered the old Puerh vintages have not lost any of their allure and their scarcity keeps their value high. (see Pu-erh Tea News to read more on investment trends).

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 is a risk.