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Pu'er tea market looking to rebound

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Only a few years ago certain aged pu'er tea varieties were selling for more than their weight in gold. Speculation by mainland investors once made pu'er tea a higher demand commodity than real-estate or stocks. That bubble lasted a year and a half before dramatically bursting in late 2008.

A serious recovery from the aftermath of the speculation craze may be beginning in Yunnan as prices of pu'er tea are once again starting to climb.

The collapse of the speculative market four years ago sent tea prices plummeting - some by more than 70 percent. Investment in pu'er tea quickly dried up and some farms in southern Yunnan completely stopped growing it.

A return to normalcy for pu'er growers and vendors has been a long time in coming. This year prices for specialty teas are not being driven up by speculators looking to diversify their portfolios, but instead by more typical market forces.

The rise in tea prices is partially due to Yunnan's on-going three year drought. Other factors, such as inflation, rising wages and steadily climbing oil prices are also pushing costs up, according to a Chinese media report.

A Kunming tea merchant quoted in the article said prices for specialty green and black teas, including pu'er, had risen 20 to 40 percent over the past year depending on the variety.

Pu'er tea is only grown in Yunnan province and is valued for its mellow taste and perceived medicinal effects.

Domestic and international buyers will gather this weekend in the Spring City for the seventh annual Pu'er Tea Expo. The event will run from April 20-24 at the Kunming International Convention and Exhibition Center.

Image: Alibaba

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