In 2007, it was estimated that as much as 95% of the pu’erh purchased was for storage and speculation, and not actual consumption (Zhang, Ancient Caravans). Psychologically free of tea going bad, pu’erh-heads are known to go a little purchase crazy. People buy and store pu’erh for many different reasons. Some of us buy as we go. Others store pu’erh as a hobby to see what might happen. Others simply store pu’erh because we bought too damn much of it!
Prices (usually) Rise Around Chinese New Year
Most vendors will raise their prices for their existing stock of pu’erh around Chinese New Year (either in late January or February). There’s two primary reasons for this. The first is pu’erh is usually considered more desirable with age and you are now paying for a year of presumably decent storage where the cake took up the vendor’s inventory space. Raising the price also helps to make their next years batch (usually becomes available in May/June/July) more appealing. Finally, part of this price adjustment will often just be market recalibration. The amount prices fluctuate depends on the supply and demand. Some teas may remain the same price while others may be raised by 2-3x! This has been trended and prices will generally rise for young tea by ~10% and older tea by ~25%.
Note #1: Pu’erh prices have gone way, way up in the last two decades. Shopping at vendors that haven’t raised their prices in a few years can be an effective strategy. What was previously fairly (or even overpriced) can suddenly seem quite appealing in the current market place (see Houde, Fine Pu’er).
Increasing Supply
According to the vice head of the Yunnan Tea Association, pu’erh production hovered around 1,000 to 2,000 tons annually from the 1970s until the early 2000s. This measurement used the 2003 definition, which oddly enough only included ripe pu’erh. With both the growth of the market and a more inclusive definition of pu’erh, production leapt to 52,000 tons in 2005 and 80,000 tons in 2006. This is a huge increase in production! Since the really good base material can’t be replenished quickly, productions have become watered down and are not the same as they once were. It should be no surprise that the 2003 7542 is several times more expensive than the 2013 7542. It’s not just its age, it’s a totally different tea.
A Few Approaches
Buy Drink Nows
This is the simplest way of buying pu’erh. Buy pu’erh that you’d like to drink! Well, duh. For some this might mean aged/semi-aged pu’erh or maybe even young pu’erh (if you’ve got the stomach chops). If you’re consumption matches your purchasing, then you don’t even really have to worry much about storage. If you want to keep the tea in its drinkable state, just put it in ziplocks. Things get a bit more intricate when we’re talking about the pu’erh addict buying beyond their means of consumption.
Pros: Simple, probably affordable.
Cons: You can only buy as fast as you can drink!
Buying Same Year Young Pu’erh
This is a pretty common way to go. Just buy it when it comes out! The price is as low as it’ll ever be.. You don’t have to worry about it selling out.. Why not get it while its hot? This can be especially appealing for low-production areas, where the price isn’t necessarily as stable. There’s a couple problems with this. Pu’erh takes a while to settle and the taste will be dynamic and change a good deal in the first few years (especially the first). This makes it an inherently riskier approach than buying something with a few extra years…
Pros: Price, available.
Cons: More duds.
Buy ~2-4+ Years Old Young Pu’erh
The National Basketball Association (the NBA) is constantly battling the players union to increase the age limit to join its league. Why? It’s not necessarily because athletes can’t become excellent pros if they declare too early for the draft (see Lebron, Kobe). It’s because the extra year is an extra year of scouting and observation for teams, that increases the certainty that they can more accurately evaluate the player a potential draftee will become. There’s a similar strategy for buying pu’erh.
If your main goal is to age pu’erh, why buy the tea fresh when it is so uncertain how it will develop? Buying tea a few years later takes advantage of the fact that the price rises relatively slowly for pu’erh when it is young (~10%). Not only do you get a few extra years of age, but simply giving the tea a few years to develop will give you a much better idea what direction the tea will age in. This is especially useful for picking out teas with processing flaws that might become apparent given a year or two. You’ll probably pay a little more than when the tea had been freshly pressed, but it might only be marginally more expensive.
However, there are inherently a few problems. The risk of selling out (or dramatic price rises). Both are significantly higher risks when the supply is limited (old trees don’t grow overnight). This small supply also makes these low-production teas prone to more dramatic price rises (i.e. the next hot pu’erh area).
Pros: More certainty with the aging path. Especially good for filtering out poorly processed tea. Often only slightly more expensive than fresh tea.
Cons: More expensive than buying young tea. Risk of the tea selling out.
Buy ~8-10 Year Old Pu’erh
The idea is similar to above. Buy the tea before it starts to rise astronomically but after you have an even better idea what it is and where it is going. This tends to be an effective strategy for big factory or mid-end tea. These teas don’t suffer as much from the fluctuations of a small supply and will probably only rise by ~10%/yearly. Unlike gushu, the risk of selling out or the price going through the roof is largely non-existent. Because of the higher production volume here, this can be a good candidate to go through Taobao. Going that route, it’s best to buy a test cake first. You’ll need to be careful of both fakes and just bad storage.
Pros: Tea is already aged, clear direction of aging path!
Cons: Have to pay a bit more for the age.
Buy Tea With Different Storage Than You
Storage can make all the difference. Seattle will never be Hong Kong or Guangdong. A fan of more humid storage but queasy about replicating the high humidity? Since you might be unable or unwilling to replicate these conditions, deliberately seek out cakes that fit within these parameters. Find a taobao vendor that sells clean, but nice teas from Guangdong. Things like traditional storage are extremely difficult (and risky) to execute.
Pros: Diversifies your stash.
12 responses to “Pu’erh Buying Categories. A Few Common Approaches.”
The lyrics to Motorhead’s “Ace Of Spades” also applies to buying puerh.
Your comment had me reading the song lyrics and meanings on Genius at 8:45AM this Sunday morning! Leave it to Uncle Larry to bring in the 1970s British rock-bands :).
Cheers,
-James
Hello James,
Another great article with some really good points. Makes me reminisce of old times.
REF – “In 2007, it was estimated that as much as 95% of the pu’erh purchased was for storage and speculation, and not actual consumption”
Raising my hand, I am very much guilty of supporting those numbers except I started earlier 🙂
During the time of building my collection (over a decade ago) I pondered many of the points you shared in this article. As I weighed my options on how deep I would dig the hole to bury my tea treasure in (or perhaps myself, not certain at the time how things would turn out) what convinced me to commit beyond what a rational and sane person would was the changing TREND of puerh tea. I sensed that the teas available to me then (2000-2005) would not be quite the same in future years. A new TREND was at hand and whether that was influenced by factors concerning the environment, production, the pursuit of big money … at the end of it the product was going to change. Since I quite enjoyed those older teas and I felt that they would be no longer available (or much harder to obtain) in future years I stocked up. My areas of concern were definitely availability and pricing.
My advice would be to know what you like. Come up with a strategy that accommodates and balances out the different variables of (ex. funds, risk, reward, quality, quantity, storage space and climatic conditions, time and effort for logistics, remaining life and perhaps future benefactor) that satisfies you and go for it.
Best, Varat
all right, the old lady in the room is gonna call your bluff now, to use a poker term, since we are still waiting to see these teas on your blog. 😉
Hello Cwyn,
Hahahaha, all in good time 🙂
The tea is definitely one of the main features I will focus on in the blog. That said I am also looking to share and build an understanding on different aspects of tea appreciation.
Best, Varat
Hi Varat & Cwyn,
Thanks for the comments. Varat, read through your comment a few times and I think it’s some very sound advice. There’s a sort of mental checklist I go through for my purchases now. I agree that the future availability/scarcity of the tea are important when considering what to buy in quantity and not. Something I’m still definitely figuring out!
Cheers and thanks for stopping in!
-James
Interesting how we tea nerds start in with our rationalizations and then the tea hoarding kicks in. Wonder if the next revision of the DSM-V will include a code for Tea Acquisition Disorder. I might start a petition to code it under Hoarding 300.3 as 300.7542
Aha. Sadly I know what you mean :(!
For me its a question of longevity on the part of the tea and the consumer. For me I calculated 5 grams per day. I usually drink way more than that….. but I’m sure some days its much less (travel, busy at work, sick/hung over). So I started with 5 grams. Then I calcualted that per day until I was 60. Why?? Because I’m a smoker. I know there is a great chance I die earlier in a crash or whatever, but I feel 60 is a safe number to play with. Also I think maybe I’ll live until I’m 90, but I doubt that if I was 90 I would be banging out 10 grams of raw puerh per day. So thats easy like 20 or 30 tongs…….. I guess the hard part is exactly what the previous poster said. Its all about changing trends. I actually have the opposite problem. I like todays puerh waaaaaaay better than 10 or 20 years ago aside from the aging. If I have a good aged tea and it has transformed and it brews out like a good aged tea ok fine I drink it super quick. However just the style of the cakes and the leafs and the level of compression and quality of the leaf is ridiculously better today than before. And I mean just think about it 30-40 years ago was still kind of the cultural revolution. Everything is better now. The chinese even chopped down their beloved tea trees, other areas were closed due to bad transportation. The only thing you could say that has gotten worse is pollution and traffic. And to that point the entire puerh market has inverted in the last 8 years. Today people don’t invest in puerh they invest in mao cha. Also there will not be another cultural revolution. So there will be no glut in the puerh market like we have had. This is why teas produced this year are way more expensive than teas produced 8 or 9 years ago. Its because all of the 70 ,60 50 and 40 year old puerh was destroyed during the war and has been hoarded since. Which is why any tea approaching 35 years is astronomical, because it was an artificial glut caused by war. today china’s just another country, no war no cannibalism so just peace, peace doesn’t bring about 10-25% returns on new puerh. Expect pressed cakes to be more for consuming and mao cha to be for investing once we breach the next 10-15 years. In the end it will come down to village, vintage and connections. Some villages some years will make better or worse tea and those vintages will command the highest prices. You won’t think about it like magic : ” oh its a 20 year old puerh from where ever pressed by whoever. It must be worth 200 a cake” No if its a good vintage it will start expensive and the price will climb more slowly than before. Kind of like wine. See no magic just ideas…………. Remember rule number one never stop drinking……
charlie
Hi Charlie,
Thanks for chiming in and sharing your thoughts! You bring up some interesting points. There’s a school of pu’erh drinkers that consider most all of the productions today to be far superior to the last 5-12 years stuff. Definitely true when you compare them to the factory tea of the mid-late 2000s.
Cheers,
-James
Excellent article, but I would love to see more videos and articles on oolongs, especially Taiwanese!
Thanks Enrique, the feedback is much appreciated. I’m not sure if there will be more articles on oolongs coming too soon but we just filmed an episode with Scott of Yunnan Sourcing/Taiwan Oolongs that featured a really tasty Lishan Tieguanyin.
Stay tuned!
-James