Is the Pu-erh tea market collapsing?

s the start of the Spring 2025 harvest season and the price of the fresh leaves is lower than last year, it is the first time it is happening in over fifteen years.

Is it the end of the golden age of puerh tea? What does it mean for you, for is, and for the tea farmers?

Let’s explore this topic briefly.

[Godismyjudge]

In my opinion the price definitely needs to drop, it's gotten ridiculous over the years, as lovely as it is it's still just tea and shouldn't be unaffordable to the everyday person especially if you want the tea business to grow. Great video and awesome to watch you withering the tea as you talk.

[tHaHxr]

Such great insights into what is happening!

I think the stiff negative price elasticity of the tea farmers in china is easily explained not just by the psychological point you mention, but also by cultural/historical perspective. China has been up to quite recently a developing country, and has never really seen an economic downturn. Thus people are used to things improving steadily each and every year, and have never even experienced the opposite happening, and perhaps dont know how to act or are stubbornly holding onto the price because they just do not want to step backwards even when necessary.

But I do agree, especially here in the west tea prices seem incredibly inflated. Even relatively poor quality tea is quite expensive due to shipping. So there indeed it would be great if the quality could steadily improve. At least personally, I would buy a lot more tea here if it had a more reasonably price/quality ratio.

I have the same hopes as you have about the tea industry. It seems in china most tea farmers/factories follow the 'trends' about whatever is popular. That means it overshadows or even swallows lesser known teas.
A good example is how 'modern' tieguanyin swallowed up most of the traditional tieguanyin and other famous teas from Anxi region (Mao xie, Ben Shan, 黃金龜 etc), which are now quite hard to find.
Personally I hope that this shift also causes a more balanced (as in, variation) tea production, because growers/factories might want to diversify instead of necessarily competing in price.

[daneascott]

Love these videos where you discuss various topics while cooking tea. Despite being a more serious topic, having the sounds of the tea cooking keeps it soothing ❤

[Lou.B]

IF the Pu-erh industry highlighted the fact that pu-erh IMPROVES as it ages, I think a price drop would definitely improve sales! "BUY FOR NEXT YEAR - WHILE THIS YEAR'S PRICE IS LOW!!!"
And NO pesticide tea, please! And THANK YOU for your work!

[Metagross]

Thanks a lot for your sharing your insights and your transparency about this!
It would have probably been easy for you to just keep all your prices the same and turn potential drops in resource prices into more profit for yourself, but I respect your decision to be open about this topic and your efforts to use price changes to improve your tea's value to money ratio.

[Peraou]

Hi William! Thanks again for another great video. I think on one topic you mentioned, I have a feeling that if retail prices actually do go down you and others will see quite a lot more orders coming in. Personally I have been lets say 'sitting on' many very full and carefully-collected 'carts' in a number of online shops, including of course yours, but the fact of the matter is the very high current prices of good puerh is cost prohibitive, so I have had to buy things quite slowly. I think that a greater, not price-to-quality, because that ratio is doing well, but rather a greater price-to-amount of tea ratio would make things much easier for many even die-hard tea fans like myself. I spend much or even most of my free time collecting tea and educating friends (and sometimes new strangers) about it, and sheng puerh (especially aged; but ofc not exclusively) is my favourite tea type, but the actual number of teas i've been able to purchase recently is quite slim, because often a single cake in the quality bracket I prefer has gone from maybe $100-150 to $3/4/500 in the past 12 years or so i've been collecting (I even used to find *many* great deals at sometimes $80 or even less(!) in a few random places for genuinely good cha bing). At least this is true in the places I've been shopping in person (Canada, then Australia), but I've also seen big price increases in many places online as well. In fact, currently in my city in Australia, the puerh cake prices are genuinely crazy, they are so way-overinflated that I can't quite fathom how market forces haven't driven the prices down yet, but it seems the small group of tea shops are all stubborn enough that no one is willing to budge and actually reduce prices to match available demand (that is pretty clearly repressed by extreme pricing). So online shopping is much more cost effective in terms of tea prices, but shipping prices to Australia for single items are extremely, seriously painful. So it's really rather a difficult situation.
Because a huge factor is, if a person has a budget of $400-500 lets say for a large occasional purchase, in the past that would have been 2-3 cakes plus perhaps other samples and a couple black/white/green teas on the side; but nowadays all that will buy you is 1 very good cake (plus samples) or 2 pretty good cakes; things are even more dire if you like aged tea. So the biggest problem is what I will call *single purchase indecision* - when circumstances have gone from being able to try 3 cakes plus small extras, in a single purchase, to buying 1 cake with extras or perhaps 2 and nothing else - *_*what*_* you choose becomes *unbelievably* more important! So I have spent 3 months, having saved up for a purchase, waffling back and forth and back and back and forth and forth again on which online shop to purchase from, or if I decided which shop, exactly *which* of their 20-100 teas to pick, and there is such an intense pressure to pick the 'perfect' tea because all I can afford is *one* tea, that I just cannot manage to decide. Furthermore I can't even really afford to get samples in advance of cake-buying, because shipping prices are so insanely punitive, it would be a *gigantic* waste of money to spend the full same cost of shipping on a couple dinky samples as spending the exact same amount on a full cake or two. So the result is, I have literally no choice but to buy blind, every time, if I am online shopping. The only option that would enable me to purchase samples, is if I buy from the same shop, for _every single purchase_ (buy one bing, two samples; pick one of the samples for the next bing purchase, and with that include two new samples; rinse and repeat)—but this is just not realistic. There are so many genuinely good shops with very different offerings, it would kind of feel quite flat to buy from the same place every single time (though of course we all have our great favourites that we come back to time and time again, but trying something new every now and again is just part of the joy of tea culture).

My (and many other *dedicated* tea people's) ability to purchase is not constricted by desire, but only by available budget. There are very, very many people out there that don't need to be convinced any further to love, understand, value, or even *want* the tea—we already do(!!!)—but even though we're already on board, constraints on purchasing are purely pecuniary. Dedicated tea people don't really want to spend _less overall_ money, because most have carefully planned tea budgets of whatever works for them - but what many people *_do_* want is to get a _larger amount_ of product for whatever the amount is that they've determined is appropriate for them.

Sorry for the long essay, but hopefully this humble comment adds a small amount more insight into the mind and purchasing decisions of myself as a dedicated tea enthusiast, but also others in a similar position who I know and speak to on the issue.


Also a random side note: having been browsing your website quite a lot, I noticed there is rather a serious glitch happening. When you click on 'teaware' only about 5 products come up as the total number available. I know you have many more available though, but at the moment (and for awhile now) the other products (like the Jingdezhen handpainted cups, and the handmade wood-fired Gaiwans) are genuinely only visible through the "you may also like" function when you click on one of the 5 listed teawares. The only reason I was even able to see that the other products existed is when I noticed that many non-listed items kept popping up in the "you may also like" suggestions when you scroll down on the page of one of the listed teawares. I imagine from my trying to cycle through these, that you probably have 30+ teawares available for sale, but only those 5 basic items are actually listed when you click on the teaware tab. (and all of the other teaware I found through the "you may also like" suggestions are listed as available and not 'sold out') So perhaps if you were not seeing sales on those items, that might be why - they're just not visible on the main teaware page. Anyway I hope that helps, and thank you very much again, love your videos ^_^

[nicholaswarren]

Thanks William, interesting to hear your perspective on the economics of Pu'er tea as always! We are seeing a similar pattern in the demand for Burgundy wine in the global market, and unlike for Pu'er tea, we have just had two very high-yielding vintages (2022 & 2023) and another good vintage to follow (2024). Yet just as with the tea farmers, winemakers have not adjusted prices to the supply increase and demand drop, with ex-domaine prices remaining stable or in some cases prices continue to increase. I am not sure whether this is the case for tea buyers, but in the case of wine importers we are left with a glut of stock which can't be moved due to local decreases in consumer spending without dropping prices on our end and decreasing profit margin. Regardless, importers are incentivized to take the full allocations they receive as priced by their esteemed (and expensive) producers in order to maintain the commercial relationship, further postponing price correction at the domaine. It will be interesting to see if and when the prices in either market collapse, but I completely share your view that a price decrease will be a good thing for both industries and clean up a lot of speculation and profit-seeking-over-quality that certainly plagues the Burgundy market and which I have no doubt plays a role in Pu'er tea pricing. The advantage tea has over wine is exactly as you mention; in relative terms there is basically nothing exported, so there is a lot of room to grow there to pick up slack where domestic demand falls, whereas wine is already a globalised commodity and is at the mercy of a global consumer demand crunch like we are witnessing at present. Promoting tea in high-income export markets - especially where there is a large Chinese diaspora and heritage community such as Australia - might be a profitable way forward. Maybe time to switch industries!

[pseudoplat]

Thank you for sharing your point of view on this topic.

[techorix]

I also would have liked to hear more about history and how it compares. But maybe that's in your other videos already. I really like your transparency and that you have no problem relaying price decreases to the consumer. I'm definitely interested in getting some affordable good quality tea this year

[redchvy]

Great information, as always. Thanks William!

[evalee]

Aloha William,
Thank you so much for sharing this update. In Hawaii we face the variables on the economic structures that best fit the market.
It is so helpful to hear the latest in what you folks face and very generous in sharing with the interest in world market. Mahalo, Eva

[yamadakenji]

I think you're right. One way of coping with the probable price drop is to go organic and that way reduce overproduction because the yield per hectar is going to go down, and at the same time making the produce more attractive to many foreign tea drinkers who have held back because of the pesticides issue, thus accessing new previously antapped markets

[Taumeltaenzer]

I definitely had the case on your website, that I really wanted to go for a very good tea, but can't afford it, because I still drink quite a lot of tea. So I went for lower quality tea for a lower price. But infomation about lower prices is key to incentives buyers like me, who would gladly buy more than four or five cakes of very good quality cakes. Thank you for the insight!

[AhimSaah]

I remember the time when puerh was 10 times cheaper. I still buy it and always will, we're a tiny community of lovers and nothing can break our passion.

[SerpenTRyder]

I always enjoy Philip's lecture over the ambiance of frying a batch of tea. I only wish he did it more often and I hope the price of tea does go down a bit since everything else is getting more expensive.

[Idavilah]

Is a good idea to promote your Pu-erth wholesale. I love Pu-erth and will going to open soon an online tea store for good quality teas.

[Bigislandchef]

Perhaps this is also an opportunity to age some tea. I know storage has a cost, but it seems it’s become harder to get 5, 10, or even 20yr old tea in the last decade or more. I imagine that overall “inventory” of aged Pu’er has dropped significantly. I know first hand that I’ve seen increased consumption of Sheng Pu’er in the West, but most are drinking young Sheng often based on price/availability.

[setheh]

Yes, please:
"I suggested that doing exports on a larger scale could be a way to save the industry, because the world is big and this is good, and if it's more affordable, if it's not a luxury product anymore, then maybe it's possible to promote it all over the world..."

[preauxtip]

Some goods show very weak price elasticity of demand ratios. It is possible that a downward change in prices, especially for high end puerh tea, could result in very little change in demand (to a point). It could even be some what in the territory of a Veblen good where a price decrease actually reduces demand for a product just because it is perceived as a worse or less exclusive product.

[nigelinasia]

If you are correct, Japan offers you potential. With the weakening of, a corresponding price drop would make your product competitive here (where there is already an embedded demand for dark teas).