The Sign of Pu-erh Tea Bubble in Yunnan

By the end of this month, I will be departing to China for tea hunting. According to the information from Yunnan province, it has been a very dry weather since the beginning of this year. Thus, if the drought continues, the appearance of the tea may not be at its best and will also affect the production quantity. Moreover, the drought also slows down the growth rate of the tea trees. As a result, the tea contains a higher level of minerals that contributes to a stronger body and deeper after taste. In addition, during the winter, the first snow fall after three decades, covered certain areas in Yunnan province, which caused damage to the tea trees, where the frostbites will affect the budding during spring. Therefore, according to the tea manufacturers, the production output may be reduced more than 10-20% this year due to the weather.

Price speculation by some manufacturers

The reduction of the production quantity does affect the price of tea in the tea market. However, in this year the price of pu-erh tea seems much higher than 10-20%. It is due to the speculation of price manipulated by some mao-cha manufacturers. In the past few years, the infrastructures in China have been vastly improved, and the cement road was drastically constructed connecting the remote areas in the mountain to the towns or cities. Way before the constructions, a trip up to the village in those remote tea mountains easily take 3-4 days to arrive; with the most primitive transportation like motorbikes or tractors, as those are the only vehicles that can access the muddy roads. Currently, we noticed newly constructed roads everywhere in Yunnan. Now, many remote villages in tea mountain can be reached within a few hours by car. Hence, this improvement in the infrastructure brings in more people to the mountain; developing a notion among manufacturers that their teas are very popular in the market. In addition, the unstable situation of the real estate in China is also mobilizing some speculative money in the tea market. This situation is a little similar to the Pu-erh tea boom that occurred back in 2006-2007. As it suddenly collapsed in 2008, the current speculation may not last for many years. I assume that the price will somehow drop in the up-coming 2 to 3 years.

It is too early to conclude

Due to the above situation, I am frequently getting in touch with the tea manufacturers in Yunnan to study the price of the Pu-erh teas. I’ve noticed an increment of 2-3 times (compared to last year) in pricing of some manufacturers, while there are some who did not wish to disclose the pricing to me at this moment as they are still observing the market trend. However, I did find manufacturer who may remain the same prices as last year.

In any case, it is a little too early to conclude the market situation in Yunnan. Now the production of Pu-erh tea has just started. Usually a lot of rumors and exaggerated price information are circulating through the villages during the beginning of the season. Once the season progress on, they would have to face the reality, by that, the prices may be stabilized around the same figure as last year. We will continue our tea quest in order to look for the right quality at a reasonable price.