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Chinese new investment strategy - Pu-erh tea collection

• Tuesday, 22 July 2014
• Written by En Jie Rudd
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There has been a recent surge of Pu-erh tea prices in China, 36%-150% over the last 12 months. Pu-erh tea is a tea class of its own, similar to premium wine in many aspects, it value increases with age. Its unique post –fermentation nature enhances its aroma and texture with time. The market value of aged Pu-erh tea generally increase by 10%-20% every year depending on the tea variety and original quality.

The following reasons are believed to have contributed to the recent surge of Pu-erh tea market prices:

1. The inflation in China is high, especially in foods.
2. The basic labour cost in the Yun-Nan Province has gone up significantly – reported to have doubled since last year. Tea making is a labour intensive process, from leaves picking to the final processing.
3. Due to the radiation concerns about Japanese tea products after last year tsunami, many tea retailers have switched to products such as Pu-erh tea. Most of Pu-erh teas are high altitude forest wild gown with low risk of industrial pollution.
4. Financial value: some investors use Pu-erh collection as investments. Many have tried share market and property investments during the last a couple decades. Property market in China now is considered to be overvalued and share market has been unstable. Pu-erh tea value increase is considered to be relatively steady.
5. Personal value: Pu-erh tea is also believed to have many potent health benefits including reducing cholesterol and weight, and assist digestion.
6. Pu-erh tea is still considered to be relatively cheap compared to other premium Chinse teas. There is therefore a bit of catching up happening.

In summary, the current demand of Pu-erh tea is high and the tea prices in China are largely driven by the balance of demand and supply. Similar to share market, we cannot predict at this point where the direction the Pu-erh tea price is pointing at. It is however the tea producer’s believe that it is unlikely to go down.

 

 

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Good news or bad news?

• Sunday, 15 April 2012
• Written by En Jie Rudd
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How much do we need to worry about pesticides when drinking Chinese teas? Any way to avoid or minimise the potential adverse effects?

There has been a recent report that many top brands of Chinese teas have been found to contain banned pesticides. For those who enjoy their daily serving of tea, what are the implications? This article attempts to explore the reasons behind the use of pesticides in the tea farming industry in China, the ways to avoid/minimise the potential adverse effects, and how these claims will benefit the tea industry in the long term.

Reasons behind the use of pesticides:

1. High demand for quantity. The tea market in China is much bigger than in the west. It would be hard to find a Chinese family that does not have a tea set in use. With such a big population and so many tea drinkers, the demand is understandably high.
2. High demand for quality. Similar to wine in the west, high quality teas are sought after in China. To produce high quality teas, well developed tea leaves are the first step and the cost of using manmade pesticides is much lower than an organic one.
3. Lack of knowledge of certain Chinese tea farmers in relation to the potential health impact of harmful pesticides.
4. Residuals in the farm lands from previous agriculture.
5. Some are just bad ethics, practice driven by profits only.
6. Lack of effective monitoring systems to regulate and track the pesticide use in the industry.

Ways of avoiding/minimising the potential pesticide contamination and their adverse effects:

As the original report pointed out ‘most of the residue levels are far below the national standard so people do not need to panic’ - the traditional Chinese way of saying it is: the clouds do not always mean rain.  I personally do not have serious concerns when I drink my cup of tea, provided the tea is in the premium quality range. My reasons are:

1. The farmers producing the premium quality teas are aware that to safeguard the quality and price of their final products, they need to take good care of every stage of the tea production and therefore have less tendency to overuse pesticides like the mass producers of low quality teas (often used in blends or tea bags).
2. The teas themselves have a detoxifying capacity. The noble Chinese ancient herbalist Shen-Nong used to drink teas daily to combat the toxicities as he tasted thousands of herbs/plants (some being health beneficial and others toxic) for the compilation of his first ever herbal dictionary – Shen-Nong Ben Cao. Recent researches have also documented that tea drinking can reduce the effects of various harmful substances including heavy metals.
3. Tea consumers also need to be aware that when pesticide residuals are tested in the labs, the tea leaves are ground for the extracts to be tested. When teas are consumed as beverages, we rarely digest the whole tea leaves. 

If the above is not enough to bring about some peace in tea consumers’ minds, there are also various ways of reducing the potentially adverse effects of pesticides:

1. Purchase organic teas or wild plant teas. The cost of purchasing these teas is higher for the same quality grade. These teas (or at least those offered at Valley Green Tea) are, however, produced from plantations where organic farming is certified by the regulating bodies, or leaves harvested from wild plants.
2. Rinse the tea leaves for 30 seconds with hot water (add hot water to the tea leaves in a teapot for 30 seconds and dispose of the water before brewing) to substantially reduce the potential dust and pesticide contamination.
3. One of the routine sayings at Valley Green Tea is to ‘know the farmer, know the products’.  We make every effort to get to know the tea farmers and plantations. I believe that only when I get to know the tea producers, will I get the first-hand knowledge of whether the farmers are environmentally-conscious and practise ethical farming, or are driven by profits only. We select our suppliers carefully and change them whenever necessary.

Good news or bad news?

Finally, I believe that the recent claim may damage consumer confidence to some extent, but will benefit the Chinese tea industry in the long term. It will draw more attention from the regulating bodies to further monitor the products and farming practices and introduce relevant guidelines to ensure the healthy sustainability of the industry. Teas have been consumed in China for more than 2000 years and there is no sign of this stopping. And for the tea consumers and tea suppliers like VGT? We believe peace of mind goes down well with a nice cup of tea.

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DEHP contamination concerns

• Thursday, 6 January 2011
• Written by En Jie Rudd
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There has been recent media scrutiny regarding certain food products from Taiwan containing chemical DEHP which is potentially cancer-causing. What teas are exposed to these risks?

There has been recent media scrutiny regarding certain food products from Taiwan containing chemical DEHP which is potentially cancer-causing. Valley Green Tea would like to inform our customers that this concern should NOT be associated with any of our products:

1. This particular contamination is solely associated with a Taiwanese manufacturer ‘Yu Shen Chemical Co’, and the local factories using their products as ingredients for their own. None of Valley Green Tea’s product is imported from Taiwan, and therefore impossible to be affected.
2. DEHP is believed to be ‘a banned chemical acting as a clouding agent’, presumably used in pre-processed foods and drinks that benefit from the ‘clouding effects’. There have been reports that certain ‘bubble milk tea (a mixed drink of tea, milk, men made pearls and other additives sold in plastic cups read to drink) ingredients imported from Taiwan carry the risk of contamination.  All Valley Green Tea products are raw dry tea leaves, without any preservative or additives added. We advise to brew only with water and avoid milk. ‘Clouding agent’ is not necessary at any stage of the tea preparation and thus totally irrelevant to our products.

We assure our customers who are not aware of the above facts that all teas sold at Valley Green Tea are free of DEHP.

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