The Hot Puer Market

As I browse the talk these days on the internet, the tea that I see discussed more than any other is puer. For a tea that was virtually unknown outside of China five years ago, I think that is pretty remarkable. Actually, prior to 2002, puer was not very well known inside of China either. So what happened? Some market manipulation, probably in Hong Kong, that would have made the great stock con artists of the 1920s green with envy.

First, a little background. Puer comes from Yunnan, where all tea in the world can biologically trace it’s roots. Yunnan is a poor province that borders Burma, Laos, and Vietnam. It was the gateway to the old silk trail to India. It is a very mountainous province and historically difficult to traverse. It is the home a many ethnic cultures that have survived culturally because of their isolation in the hard to travel mountains. The American Army built one of the first roads during World War 2, and there hasn’t been many Americans in that area since.

For the last five years the Chinese tourist industry has focused on developing Yunnan as a tourist destination for Chinese tourists. In 2000 my son and I traveled there for the first time as members of a Chinese tourist group, in orange baseball caps, we were hustled from jade store to jade store, as our bus chugged along from Kunming to Lijian and back. He was eight at the time and his Chinese was much better then mine. Puer was not on the radar screen then. I did find some toucha in Dali, made by the famous Xiao Guan government factory. It was really a novelty item then. I could have bought toucha going back twenty five years for a song, but I didn’t want to lug it around. Crazy. I didn’t buy much jade either.

Even within Yunnan, puer was not an esteemed tea at that time in comparison to green tea, and black tea for foreigners. The locals still drink a lot more green tea than puer tea. Puer since at least the Tang dynasty was manufactured for export. In 2002, even in the vast Fangcun Wholesale Tea Market in Guangzhou, there were only a handful of puer traders. Now there are hundreds.

Why the big jump in the market? Well, if you visit any of these new outlets in Fangcun, they will tell you of an auction that happened that year, or it may have been the year before. (the facts quickly become hazy) There were some old cakes that were found, in Macao, that were auctioned off for an enormous amount of money. Auctioned to who, by who, at what place? No one knows. The  the amount fetched continues to rise. It is what we would call an urban legend. It’s a story everyone loves to tell. It probably had it’s origins in the resourceful puer marketers of Hong Kong. There is never any details to be had about this auction, and no other cakes have surfaced to have fetched outlandish prices, but a buying frenzy did occur, and it continues today. Of course there are rumors that float around puer circles about conspiracies to drive up prices, and some major players are suspected. Follow the money is always a good suggestion. Now puer really is a real collectable and is being stored in safes.

This marketing, however, has resulted in some very positive improvements in the puer production and some real benifits for Yunnan. There will always be cheating that happens in this market, but it is usually with old cakes. The quality of a lot of the newer cakes has improved enormously from the old government factories that made the older cakes everyone is paying a upscale price for now. There has been a large infusion of cash into the Yunnan countryside. Roads are being built, and there is even talk about preventing the terrible erosion of the mountains caused by sugar cane production. There are some maocha buyers that are encouraging saving the older trees that do not produce like bushes, and paying a bit extra for the leaves.  Factories have been rebuilt and cleaned up with thoughts of organic certification in mind.

With all of the inflation of price for older puer, the price for new puer is still a bargain at ten times what it used to be in 2002. When you consider what a good quality green or oolong is worth, it’s a deal. The changes in Yunnan since I first visited with my orange hat and my son as an interpreter is amazing. So if there was some manipulation in the market, ok. For those collectors after the old cakes, good luck. A real thirty year old cake is worth the trouble, and the new cakes will be amazing in thirty years because so much care is going into the production. What was once the tea only good enough for Tibetans and Mongolians are the prices for Chinese movie stars and the rising stars of business. Which is the better deal in a Hangzhou restaurant, a good French Pinot Noir or a thirty year old puer? Authentication of either? Does it matter after that meal?