Puer bubble bursts, again?
Wow, this story is almost a year and a half late. The crash came in the summer of 2007. The crash has been a good thing for everyone except for the tea merchants and puer speculators in Hong Kong and Taiwan, that hoped to get rich fast from puer, much like mortgage brokers and investment bankers in the US.
The people that really knew puer and knew the market were not so gullible. Seven Cups bought no puer in 2007, and neither did serious collectors. We started being careful when we heard as early as 2003 that people were trying to corner the puer market by buying vast amounts of puer. The serious producers were not caught up the frenzy, and were dismayed to see the explosion of factories in cities like Simao. Simao, even went so far as to change it’s name to Puer City, leaving the old Puer City in the dust.
Things in Yunnan are returning to normal and the the speculators are left holding the bag. I don’t think they are too worried, though. Puer has not lost it’s mystique. I’m sure that 2007 puer will be really sought after 20 years, and so will a few fake puer cakes that were purchased by the Chinese collectors that had so much money, they didn’t care if they were duped. I doubt that there were even many of those, because on of the factors that spurred the bubble were stories of fantastic prices paid, fabulous auctions, and unsophisticated buyers. My son still has a perfect , complete set of Pokemon Cards. I wasn’t smart enough to not buy them. I’m not throwing them out though.
China tea party crashed by end to investment frenzy
By Simon Rabinovitch
BEIJING, Dec 9 (Reuters) – Those nursing losses in their stock portfolios should spare a thought for Chinese investors who piled into the tea market in one of the more frenzied and bizarre speculative bubbles last year.
The price of puer tea, a fermented variety from the country’s southwestern Yunnan province, has crashed under the weight of overproduction and a vastly diminished appetite for exotic assets.
Puer tea has shed 85 percent of its value since peaking in May last year, industry watchers said on Tuesday. That is even worse than the Shanghai stock market, which has tumbled nearly 70 percent from a record high scaled 14 months ago.
“People who did not really understand the industry have been hit the hardest,” said Yong, the representative of a puer trade website (cnpuerh.com) based in Xishuangbanna, a mountainous region in Yunnan that produces the tea.
Yong, who did not want to give his first name, said many of the tea farms that turned to puer when it was the darling of investors have quit the business.
[From Business Feed Article | Business | guardian.co.uk]