I am puzzled to read now pu'erh tea leaves can fetch thousands of dollars per kilogram, and the price seems to rise for sometime.
In 80's when I was young, pu'erh tea was a cheap variety of tea. It was until last ten years that suddenly its price has shot through the roof.
Price is always a function of demand and supply.
On the demand side, it could be the richer Chinese demand better tea leaves, thus larger demand drives the price up.
On the supply side, producers can limit its production rate, introduce different 'grades' for tea leaves in order to price differently, and have specialized 'attack teams' to make a run on tea leaves, driving up prices to create illusions that tea leaves can be a kind of investment instrument.
This phenomena of 'scarce commodity X' becomes more and more common this days. Prices are shooting up not only for non-renewable commodities, the craze also affects renewable resources like flour, chicken, pork, cooking oil, and of course, tea leaves.
How do we, normal folks, deal with this then?
First and foremost: a healthy body. You never know how much money a healthy body can save you.
Next, a skill set that is up-to-date and relevant.
Third, a plan that includes risk-control for worst cases.
Finally: luck. Hope for the best. :)
3 comments:
I don't think the demand is fake because it has been sustained for so long. Bootleg producers would have created a black market...
I think the only think that has changed is that the demand line was pushed out because people found that pu erh was under-rated.
Tea fads come and go. About 10 years ago, Long Jing (dragon well) fetched high prices... then they increased supply. For pu erh, it seems that the long fermentation process adds some value...
Something like the Tulip mania in Holland in the 17th century? I think that more closely resembles the tea leaves story. The crowd has been sold on the idea that tea leaves are worth a lot more than they really are. Both of which are also luxury goods.
Using the reason of scarcity to drive up necessary food items is another kettle of fish, me thinks. It preys on the needs of the people, while the former preys on the wants.
The demand could be real, but supply side must have done something to control the volume so that the price can be boosted. The latest price goes up to $150k per 100g for a 100-year old tea brick. Think about it.
This pu-er mania is much better controlled and manipulated than Tulip mania. Lessons learned :P
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