20080316-agri-tea Nolls.jpgChina is the world’s leading tea producer. India is second. Sri Lanka and Kenya are large producers. China exports around $100 million worth of tea every year. A lot of the tea produced in China is consumed domestically.

In 2009, tea is grown on 1.86 million hectares in China, the largest amount of any country in the world. China also produced the most tea that year, harvesting 1.35 million tons. More than 80 million people work in the tea industry as farmers, workers or sales people. [Source: Ben Yue, China Daily, March 28, 2011]

Chinese government is concerned that the tea industry was too diffuse. China has 70,000 tea companies but not a single internationally strong brand. There is a widely known saying: "Seventy-thousand Chinese tea companies are equal to one Lipton in terms of turnover." According to guidelines from the Ministry of Agriculture issued in 2009, China plans to focus tea production into four main areas and improve tea quality by employing better growing methods by 2015. [Ibid]

"The hundreds of different types of tea drunk by Chinese people mean it's not possible to develop the Chinese tea industry into a company like Lipton's, which is standardized with no difference in quality," said Wu Xiduan, general secretary of the China Tea Marketing Association (CTMA)

There are two main varieties of tea plant: the small-leafed China plant and the large-leafed Assam variety, discovered on the Burma-India border in 1824. There is also a Cambodian variety used mostly in hybrids.

Tea grows best in misty, rainy regions at altitudes of 2,000 to 7,000 feet in the tropics and lower elevations in temperate regions.. The best tea is produced in regions that have dry days and cool nights. Slow growth under some stress brings out the best flavor in tea but yields are lower under these conditions.

Tea bushes are pruned to about one meter in height so they can be easily plucked. If left unattended they would grow into 12-meter-high trees. The bushes produce a white flower and a hazelnut-size fruit with three compartments, each with a seed. In many cases these are not allowed to develop. The leaves of the plant are what produces tea. The tea flavor is produces by oils in the leaves

Tea requires year round maintenance. Every one to five years the plants are trimmed from waist to knee height to keep them from growing into trees and prevent the branches from extending too far sideways. Seasonal pickings keep the bushes trimmed like a hedge.

The waist-high bushes at a typical tea plantation are often 25 to 90 years old. Tea growers are now experimented with new strains such TV29 that produce as many more quality leaves than present bushes.

Websites and Resources

Good Websites and Sources: Book: All the Tea in China by Kit Chow and Ione Kramer; Wikipedia article on History of Tea in China Wikipedia ; Rare Teas holymtn.com ; Tea Culture index-china-food.com ; Asia Recipe asiarecipe.com ; 19th Century Tea Trade in China Harvard Business School

On Agriculture: Wikipedia article Wikipedia ; Wconomy Watch.com economywatch.com ; Products List and Links made-in-china.com ; China’s Ministry of Agriculture Data english.agri.gov.cn ; End of Agriculture in China, NPR Report npr.org ; Library of Congress Report from the 1980s lcweb2.loc.gov ; Can China Feed Itself? iiasa.ac.at/collections ; Essay on Agriculture and WTO Membership mtholyoke.edu ; Changing Agriculture and Farmers sociology.cass.cn

Links in this Website: TEA AND SOFT DRINKS IN CHINA Factsanddetails.com/China ; AGRICULTURE IN CHINA Factsanddetails.com/China ; AGRICULTURE IN CHINA UNDER MAO AND DENG XIAOPING Factsanddetails.com/China ; PROBLEMS FACED BY FARMERS IN CHINA Factsanddetails.com/China ; LAND SEIZURES AND FARMERS IN CHINA Factsanddetails.com/China ; CROPS IN CHINA Factsanddetails.com/China ; RICE AGRICULTURE IN CHINA Factsanddetails.com/China ; TEA AGRICULTURE IN CHINA Factsanddetails.com/China ; LIVESTOCK IN CHINA Factsanddetails.com/China ; SILK IN CHINA Factsanddetails.com/China ; POOR PEOPLE IN CHINA Factsanddetails.com/China ; RURAL LIFE IN CHINA 14 ; VILLAGES IN CHINAFactsanddetails.com/China

Tea Producers and Consumers

Tea is more popular than coffee almost everywhere in the world except the United States, where it trails behind soft drinks, beer, milk and coffee in popularity. In contrast to the rest of the world which likes its tea hot, 80 percent of the tea served in the U.S. is cold.

U.S. tea sales quadruped between the late 1990s and the late 2000s, reaching the $5 billion mark in 2005 and is expected to rise to $10 billion by 2010.

Tea sorting
Tea is usually at auctions in the country of origin or at commodity markets in Europe or the United States and simple sold in deals made between producers and buyers. In the old days tea was sold in chests and buyers drilled holes in the chests to sample the quality.

Top Producing Countries: (Production, $1000; Production, metric tons in 2008, FAO): 1) China, 1380615 , 1275384; 2) India, 871615 , 805180; 3) Kenya, 374331 , 345800; 4) Sri Lanka, 344995 , 318700; 5) Turkey, 214386 , 198046; 6) Viet Nam, 189331 , 174900; 7) Indonesia, 163297 , 150851; 8) Japan, 104462 , 96500; 9) Argentina, 82270 , 76000; 10) Thailand, 66636 , 61557; 11) Bangladesh, 63868 , 59000; 12) Malawi, 52112 , 48140; 13) Uganda, 46340 , 42808; 14) Iran (Islamic Republic of), 45842 , 42348; 15) United Republic of Tanzania, 37671 , 34800; 16) Myanmar, 28686 , 26500; 17) Zimbabwe, 24139 , 22300; 18) Rwanda, 21612 , 19965; 19) Mozambique, 18257 , 16866; 20) Nepal, 17493 , 16160;

Tea sales in the United States rose from about $1 billion in the 1990s to over $5 billion in the early 2000s. In recent years green tea has become increasingly popular in the United States and Europe. Many on the United States drink for its purported health benefits. As of 2002, it accounted for 8 to 9 percent of total U.S. tea consumption. Some Starbucks sell Matcha Cream Frappuccino.

Green tea has been popular before. From the 1870s to World War II, 90 percent of the tea imported into the United States was Japanese green tea. Minerals were added to the tea that gave it a brownish color like black tea.

Exotic Tea Businesses in China

A modern Chinese tea company is contemplating delivering an equally powerful image to the world. Sichuan Emei-shan Zhuyeqing Tea Co Ltd, one of the nation's largest by sales, sells its flagship product "Spring Autumn of the Han Dynasty" at 23,800 yuan for a 500-gram presentation box. All the leaves are perfectly shaped. Even the box recalls the Han Dynasty (206 BC to AD 220) with its red and black paint.

The company now runs more than 100 boutique shops in China. There are 15 shops in Beijing. Some of them are next to high-end supermarkets such as BHG. People can sample the drink there and inspect the boxes. The "Lun Dao" series comes in a box designed by Chen You-jian, the famous Hong Kong art designer. They are sold for about 3,000 yuan each, and are considered to be collectors' items.

Another retailer, Baoxing Haixin Tea Ltd, grows organic green tea in Sichuan province. The owner of the business, Zhang Haixin, was a paper trader 20 years ago. In 1991 he bought a 20-hectare farm growing a local variety of green tea called Zhuyeqing (or Bamboo Leaf) organically. Every spring, the company invites skilled tea workers from Hangzhou, Zhejiang province, where the most famous green tea, Longjing, grows. As the organic lifestyle has become more popular, Zhang's business has grown rapidly.

Pu'er Tea

20080316-tea picking in Zhejian u wash.jpg
Tea picking
Pu’er, one of the most exotic teas, is green tea fermented with bacteria. Invented by Tang Dynasty traders. It is produced mainly from scrubby green tea trees that blanket the mountains of fabled Menghai County in Yunnan Province. Pu’er is pleasantly aromatic beverage that promoters claim reduces cholesterol and cures hangovers. The best Pu’er teas are aged 20 to 60 years and has been described as being "like a monk---very plain, enduring."

The Jinou and Hani minorities are known in China for cultivating tea bushes that are the source expensive Pu’er tea. Some of the bushes are over 100 years old. Puer is known as “green gold.” It was a key trading item on the ancient “Tea and Horse Route.”

Pu’er has attained near-mythic status. A favorite of emperors and imbued with vague medicinal powers,Pu’er was supposedly invented by eighth-century horseback traders who compressed the tea leaves into cakes for easier transport. Unlike other types of tea, which are consumed not long after harvest, Pu’er tastes better with age. Prized vintages from the 19th century have sold for thousands of dollars a wedge. [Source: Andrew Jacobs, New York Times, January 16, 2008]

Over the past decade, the industry has been shaped in ways that mirror the Western fetishization of wine. Sellers charge a premium for batches picked from older plants or, even better, from wild tea trees that have survived the deforestation that scars much of the region. Enthusiasts talk about oxidation levels, loose-leaf versus compacted and whether the tea was harvested in the spring or the summer. (Spring tea, many believe, is more flavorful.) If you study Pu’er your whole life, you still can’t recognize the differences in the teas, one tea buyer said. . I tell people to just buy what tastes good and don’t worry about anything else. [Ibid]

Rise of Pu'er Market in China

From 1999 to 2007, the priceof Pu’er, increasedtenfold, to a high of $150 a pound for the finest aged Pu’er. Pu’er became the darling of the sipping classes in recent years as this nation’s nouveaux riches embraced a distinctly Chinese way to display their wealth, and invest their savings. [Source: Andrew Jacobs, New York Times, January 16, 2008]

Tea planting
Fermented tea was hardly the only caffeinated investment frenzy that swept China during its boom years. The urban middle class speculated mainly in stock and real estate, pushing prices to stratospheric levels before exports slumped, growth slowed and hundreds of billions of dollars in paper profits disappeared over the past year. [Ibid]

In the mountainous Pu’er belt of Yunnan, a cabal of manipulative buyers cornered the tea market and drove prices to record levels. Many investors were led to believe that Pu’er prices could only go up. [Ibid]

Farmers bought minivans, manufacturers became millionairesand Chinese citizens plowed their aavings into black bricks of compacted Pu’er. The saying around here was “It’s better to save Pu’er than to save money,” said Wang Ruoyu, a longtime dealer in Xishuangbanna, the lush, tea-growing region of Yunnan Province that abuts the Burmese border. Everyone thought they were going to get rich. [Ibid]

Many had never experienced the kind of prosperity common in China’s cities. Villagers built two-story brick homes, equipped them with televisions and refrigerators and sent their children to schools in the district capital. Flush with cash, scores of elderly residents made their first trips to Beijing. Everyone was wearing designer labels, said Zhelu, 22, a farmer who is a member of the region’s Hani minority and uses only one name. A lot of people bought cars, but now we can’t afford gas so we just park them. [Ibid]

Collapse of the Pu'er Market in China

Then suddenly the prices of Pu’er fell to far below its preboom levels. The collapse of the tea market turned thousands of farmers and dealers into paupers and provided the nation with a very pungent lesson about gullibility, greed and the perils of the speculative bubble. Most of us are ruined, said Fu Wei, 43, one of the few tea traders tosurvive the implosion of the Pu’er market. A lot of people behaved like idiots. [Source: Andrew Jacobs, New York Times, January 16, 2008]

The rise and fall of Pu’er partly reflects the lack of investment opportunities and government oversight in rural Yunnan, as well as the abundance of cash among connoisseurs in the big cities. Wu Xiduan, secretary general of the China Tea Marketing Association, said many naïve investors had been taken in by the frenzied atmosphere, largely whipped up by out-of-town wholesalers who promoted Pu’er as drinkable gold and then bought up as much as they could, sometimes paying up to 30 percent more than in the previous year. [Ibid]

He said that as farmers planted more tea, production doubled from 2006 to 2007, to 100,000 tons. In the final free-for-all months, some producers shipped their tea to Yunnan from other provinces, labeled it Pu’er, and then enjoyed huge markups. But with no empirical way to establish a tea’s provenance, many buyers were easily duped. [Ibid]

When values hit absurd levels the buyers unloaded their stocks and disappeared. The market was sensationalized on purpose, Wu said, and when the buyers unloaded their stocks the market was saturated to an extreme level and prices crashed.

Consequences of the Collapse of the Pu'er Market

Tea drying
For tens of thousands of wholesalers, farmers and other Chinese citizens who poured their money into compressed disks of tea leaves, the crash of the Pu’er market has been nothing short of disastrous. At least a third of the 3,000 tea manufacturers and merchants have called it quits in recent months. Farmers have begun replacing newly planted tea trees with more nourishing---and now, more lucrative---staples like corn and rice. Here in Menghai, the newly opened six-story emporium built to house hundreds of buyers and bundlers is a very lonely place. [Source: Andrew Jacobs, New York Times, January 16, 2008]

Very few of us survived, said Fu, 43, among the few tea traders brave enough to open a business in the complex, which is nearly empty. He sat in the concrete hull of his shop, which he cannot afford to complete, and cobwebs covered his shelf of treasured Pu’er cakes. All around him, sitting on unsold sacks of tea, were idled farmers and merchants who bided their time playing cards, chain smoking and, of course, drinking endless cups of tea. [Ibid]

Dozens of vibrantly dressed women from Xinlu sat on the side of the highway hawking their excess tea. There were few takers. The going rate, about $3 a pound for medium-grade Pu’er, was less than a tenth of the peak price. The women said that during the boom years, tea traders from Guangdong Province would come to their village and buy up everyone’s harvest. But last year, they simply stopped showing up. [Ibid]

Back at Menghai’s forlorn tea city, Chen Li was surrounded by what he said was $580,000 worth of product he bought before the crash. As he served an amber-hued seven-year-old variety, he described the manic days before Pu’er went bust. Out-of-towners packed hotels and restaurants. Local banks, besieged by customers, were forced to halve the maximum withdrawal limit. [Ibid]

People had to stand in line for four or five hours to get the money from the bank, and you could often see people quarreling, he said. Even pedicab drivers were carrying tea samples and looking for clients on the street. [Ibid]

A trader who jumped into the business three years ago, Chen survives by offsetting his losses with profits from a restaurant his family owns in Alabama. He also happens to be one of the few optimists in town. Now that so many farmers have stopped picking tea, he is confident that prices will eventually rebound. As for the mounds of unsold tea that nearly enveloped him, the best thing about Pu’er, he said with a showman’s smile, is that the longer you keep it, the more valuable it gets. [Ibid] Image Sources: University of Washington, Nolls China website http://www.paulnoll.com/China/index.html , Beifan.com http://www.beifan.com/ ; Weird Meat; All Posters com http://www.allposters.com/?lang=1 Search Chinese Art

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

Last updated April 2010

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