The puer bubble burst last year. By in large, the people that were hurt worse were the speculators. Not the big collectors, they didn’t buy during the bubble, and were wise buyers when they were. The people that really got burned were the Chinese wholesalers and small shop owners that fueled the bubble. The people that were interested in fast cash that jumped into the market. For the puer market in general, the bubble was a long term help.
The infusion of cash helped to renovate existing factories and start new ones in a very poor area of China, and expanded the tea base, and also set a higher standard for quality, by stimulating competition. Most importantly in my mind, it made more people aware of puer and broadened the market both domestically and internationally, even attracting a front page story in the Wall Street Journal, in both Hong Kong and New York.
It is true that people lost money, and that a lot of the new factories have since closed, and the are a lot of overpriced 2007 cakes sitting in a lot of shops that will take time to sell, but it is easy to imagines that in twenty years those cakes will be highly prized as having been produced during the year of the crash of the puer market.
As a puer buyer that bought no puer in 2007, I found some great deals in Yunnan this year, and have quite a few more customers that are interested in puer than I did in 2006. Puer had been underpriced, and still is, compared to the finer green teas and oolong teas, and even some black teas. One hope that in the next couple of years puer will come into it’s own with sustainable fair prices for new puer. I’m hopeful.
Read the story here:
EMBARGO: In once-booming tea region, a bitter reality
By Andrew Jacobs
Published: January 9, 2009
MENGHAI, China: Before American real estate prices deflated, before the stock market nose-dived and before the Ponzi-madness of Bernard Madoff, there was the Pu’er Tea Debacle of Menghai County.
Pu’er tea, a pleasantly aromatic beverage that boosters claim reduces cholesterol and cures hangovers, became the darling of the sipping classes in recent years as this nation’s nouveaux riches embraced a distinctly Chinese way to display their wealth, and invest their savings. Between 1999 and 2007, the value of Pu’er, a fermented brew invented by Tang Dynasty traders, increased tenfold.
In mid-2007 the finest aged Pu’er changed hands for $150 a pound, or $330 a kilogram. Now it can be had for a tenth that price.
[From EMBARGO: In once-booming tea region, a bitter reality – International Herald Tribune]