Tea is the most consumed beverage in the world. And although it is produced widely around the world, the best of the best teas are all still produced in China. ‘Long Jing’, ‘Tie Guan Yin’, ‘Pu’er’ are all legendary teas steep in history with a matching flavor profile. Not many would also know that ‘Pu’er’ is able to age like fine wine and because of this, it is suitable as an alternative investment. Many Chinese invested in Pu’er tea as an alternative investment much like how the western world and also much of the world right now are investing in fine wine as an alternative investment. The Chinese fascination with Pu’er actually resulted in a bubble forming in the Pu’er market and it burst back in 2007, since then it has recovered. In 2009, the China Construction Bank launched a Pu’er tea investment product—where investors are able to receive annualized 7-percent return in tea or cash.
Pu’er is a tea that is only produced in specific parts of Yunnan, China mainly because of the terroir and like champagne, it is protected and only tea made from the specific areas would be able to name their tea Pu’er. Tea produced from more well-known regions and producers would tend to cost more, as does tea plucked from older trees and tea that has aged for a longer time. There are Pu’er tea dating back all the way to the 19th century or the days of the Qing Dynasty. It is not possible to get a good gauge of the price of the aged Pu’er as the selling of the tea is really exclusive and it is not something that you could buy even if you have money. The sellers of these old teas would have to deem you worthy first and then you could talk privately afterwards.
The Chinese fascination with tea is like their obsession with jade in the sense that it is only something that the Chinese understand and appreciate but times are changing. If the Chinese could learn and are willing to pay top dollars for the best red wine out there, I think likewise for tea, the west could learn much about it from them. This is evidently seen in several Michelin star fine dining establishments where they are now offering tea pairings for different courses instead of the usual wine pairing. Also in recent years, Matcha became really popular throughout the world. This are indicators that the world is getting more interested in tea.
Pu’er field in the Yunnan province. PHOTO SOURCE: Morgann
There is a reason why tea drinking has flourished for thousands of years, is an integral part of Chinese culture and life and also the mass proliferation throughout the entire world. No one is able to quite do tea like the Chinese. After many years since the end of China’s Monopoly on tea production, they are still the powerhouse in the industry, the best is still Chinese tea
Through extensive interviews with local farmers, Selena Ahmed, an American ethnobotanist, has compiled a detailed record of tea prices in Xin Banzhang, where high-end Pu’er is grown. In 1985, farmers in Xin Banzhang were paid 45 cents for a dried kilo of spring Pu’er tea. In 2000, it had increased to $1.46 cents. By 2010, the price for a kilo of spring tea was $220 — a 150-fold increase in a decade. By spring 2015, the farmers in Xin Banzhang were hauling in $713 per kilo — roughly $200 more than a kilo of silver.
From the 1990’s until the burst of the bubble in 2007, speculators from Taiwan, Hong Kong and Guangzhou started buying up huge quantities of Pu’er tea when it was worth peanuts. After securing the supply, they started marketing it throughout China, creating greater demand for Pu’er and with them restricting the supply. When the price starting peaking, they started releasing more supply into the market and they cashed out during the peak of 2007. Subsequently, the market crashed during the same year. When the prices of the tea were near the peak, many people in other regions started creating fake Pu’er tea to get in on the action and according to some, that was partly why the market crashed. The market subsequently recovered and during 2008, the government passed a law to indicate that only tea produced in Yunnan, China can be considered Pu’er. After the crash, you would be glad to know that the market is not controlled by a few individuals anymore.
The older it is, the more valuable Pu-er becomes. If you are considering investing in fine wine to diversify your portfolio, you could also consider adding Pu’er tea. As more Chinese are getting richer day by day, they would want to invest or spend their newly earned capital on the finer things in life. Whether it be property, fine wine or tea. It’s a roller-coaster ride but it is definitely going up. Pay attention to what the Chinese are doing as these days the Chinese are the ones paying record-breaking prices auction after auction, not just for fine wine and whisky but also in something closer to their hearts: Pu’er tea.