Saturday, May 15, 2010

Tea Expo News

This article is from the China Daily (5 May 2010) by Ye Chun and Li Yingqing entitled "Rich Pickings from Pu'er"

The verdict from this year's Tea Expo is that quality and prices are both on the up. Ye Jun and Li Yingqing report

The mission of Gao Yuan, a licensed tea brewer, at the 5th China Yunnan International Pu'er Tea Expo, was to find good teas.

he 32-year-old opened her own tea store in Kunming, capital city of the province, in 2003, and she now provides tailor-made teas to big companies in Yunnan and Hong Kong.

Gao only deals with Pu'er tea, not least because she finds it the most interesting.

"There is always so much to talk about Pu'er. The quality varies depending on the altitude the mountain where the tea grows, the year of production, and the way it is processed," she says.

This year's Pu'er Expo, an annual event organized by the Chinese Ministry of Agriculture and Yunnan provincial government, ran from April 12-15, amid concerns about the severe drought.

According to the government, production is down by 50 percent and the purchase price of the fresh leaves has doubled.

And both the price and quality of tea were Gao's main concerns.

"What I'm look for are good-quality, reasonably priced teas, instead of the already famous teas that are soaring in price," she says.

According to Zhu Yongchang, owner of Purple Jade Tea Factory, while the drought has made the leaves thinner, weaker and less attractive, it has also made the quality better, as the picking was delayed, and therefore the spring tea had time to gather more strength.

The teas of Yunnan are characteristically big-leaf teas produced on tall tea trees - as compared to tea shrubs in other parts of China - and 95 percent of the province's teas are planted on mountainous areas.

While terrace teas are heavily influenced by the drought, ancient tea trees on high-altitude mountains, which vary in age from 100- to 2,000-years-old, are less affected.

Pix is a 2003 ripe pu erh.

The whole chain of the tea industry is represented at the tea expo: tea farmers, tea factories, small and big tea companies, teapot makers, even packaging, and tea utilities.

At the display station of the Purple Jade Tea Factory from Lincang's Yongde county, roughly processed teas cost from 60-70 yuan (S$12-S$14) per kilo, with the best quality tea 120 yuan ($18) per kilo.

Owner Zhu Yongchang said they would cost another 20 per cent more after they are pressed into cakes.

Zhu's company was established in 1986, and provides middle to high quality teas from five tea mountains with ancient tea trees.

Many China tea companies complain that European quality checks are too strict, but Zhu exported 250 tons of black tea to the European Union last year.

"People here need to be practical, and not always expect high profits from exports," he says.

This year, he had to turn down a request for 50 tons from the EU for spring tea, because of the demand from the domestic market.

"The market is becoming relatively stable, and the bubbles are gone," says Zhu.

"Pu'er tea was once mythicized, publicized as herbal medicine, promoted as antique, and speculated like stock shares. But tea is just tea."

Gao Yuan says there are still faulty business practices in the market, as some dealers mix poor teas with good ones.

To ensure the quality of her teas she spends two to three months every year visiting tea farms to see for herself how the teas are produced.

"The only thing I can do is to get there, look closely, and try as many teas as possible," she says.

However, Gao says that after 2007, most buyers are clear-minded, and will be very cautious about attempts to hype up Pu'er.

"I'm in no rush buying, and will be selling from storage for now," she says. "I believe consumers will not be affected a lot in the near future."

Still, she bought up all 30 kilos of roughly processed Plum Green Pu'er tea from Zhu Yongchang.

Sales were also strong for a newly promoted instant Pu'er tea with the brand name Deepure from Tianjin's Tasly Group.

The powdery matured Pu'er in 0.5 gram sachets can easily be prepared in just three seconds.

The group used high-tech methods and equipment to make the Pu'er swiftly soluble.

According to Luo Chunlei, Southwest China sales manager, the product has sold out, and the group expects annual sales this year to be around 800 million yuan ($117 million).

According to Yang Shanxi, director of Yunnan government's Tea Office, 227 enterprises participated at this year's Pu'er Expo, including business people from Vietnam and Sri Lanka.

There were about 20 Vietnamese dealers, the most in the Expo's history, selling wooden tea tables, decorative items, bracelets made from sandalwood, and incense from gharu wood.

The Yunnan Dianhong Black Tea Group's station at the Expo had a bartender mixing black tea with ice and strawberry, lemon, and Teh Tarik, which many young people liked.

General Manager Lou Zitian says the group's high-end Yunnan black tea has been sold out for several months.

Yunnan produced 180,800 tons of tea last year.

Spring tea takes up 25-30 percent of annual production.

But Yang believes the price of Pu'er tea will not be influenced much by the drought.

"Pu'er, unlike other teas, gets better with storage," he says. "Many big companies have big stores of Pu'er from previous years, and are not short of supply."

"However, high-end Yunnan green tea and black tea will be short of supply," Yang says. "Consumers will definitely face higher prices."

My opinion towards 2010 pu erh tea harvest is that the prices of this year's pu erh tea will be high, and the tea quality may be affected by the drought.  The asking prices on ebay for this year's 7542 is about us$20 (I just checked this morning).   I am of the view that chinese tea prices will generally be more expensive due to a more affluent China and greater demand from overseas but the significant price increase of this year's harvest  was primarily caused by the poorer tea harvest. Caveat emptor.

Pix is a 2003 ripe cake,  purchased last month for under us$20.

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