What Determines Pu Erh Tea Prices?

What Determines Pu Erh Tea Prices?

Pu erh is a type of tea that's mainly produced in China's Yunnan province. In this article we're going to list and discuss all the factors that affect the final price of a pu erh tea.

Environmental conditions

How good a pu erh potentially can taste, depends on the where it all starts, and that's the environmental conditions in which the tea trees or bushes are grown.


Altitude is an important factor that affects the pu erh tea price. High mountain weather conditions are often more favorable with more sunshine and cool night temperatures. Under these conditions, the leaves develop more substance during the day, while the cool temperatures let them rest during the night. As a result, the tea will have a richer flavor and stronger after taste.

Soil Quality

Very related to high altitude is soil quality. On the mountains, there's hardly any pollution or waste, and the abundance of leaves falling from trees allow the soil to be very fertile and mineral rich.

Quality of the Year

Similar to wine, the quality will also depend on the year of production. This is important because pu erh can be kept for long-term aging. Dry and sunny weather with a small amount of rainy days is generally the best for pu erh. Too much rain will let the leaves grow to fast, and accumulate less minerals and thus flavor.

However, Yunnan is a large province and different areas might have different weather conditions in the same year. Therefore, this factor needs to be considered per region.

Nationalization and Privatization of Tea Factories

Talking about the quality of the year, we also want to introduce a piece of history. In 1949, tea farms in Yunnan were nationalized by the Communist Government, and eventually converted into 4 large factories:

  • Kun-ming Tea Factory (昆明茶厂)
  • Meng-hai Tea Factory (勐海茶厂)
  • Xia-guan Tea Factory (下关茶厂)
  • Lin-chang Tea Factory (临沧茶厂)

Factories tend to have their own specializations. See for example the dome-shaped ripe pu erh tea from Xiaguan tea factory.

Xiaguan pu erh tea in tuocha shape.

At first, this wasn't a bad thing. All the way until 1970, the quality was excellent as many skilled technicians were hired to control the raw materials and production. However, after the 70s demand for pu erh increased, and the factories started to shift their focus more on scale and reaching production targets. Tea gardens, were set up to reach this demand. The quality was still excellent though.

After 1990 the tea factories where privatized again, and divided into several small factories, though the big 4 factories remained big. Things got less transparent as the skilled technicians retired and loss control over the raw material selection and grading.

Raw Material Grade & Tree Age

In Yunnan, raw materials are classified based on the tea trees they come from. These are classified into 4 categories:

1. Garden tea

With garden tea, we mean tea that's picked from tea gardens with trees that are short and young. Garden tea usually have less after taste and they're considered the lowest grade. Of course, there are exceptions, and that's when the garden tea is grown on high altitudes. Most ripe pu erhs are often made from garden tea.

2. Young tea tree

Young tea trees are around 100-200 and planted on mountain slopes between native trees. They produce a better flavor and after taste. Young tea tree plants are used for both good quality ripe and raw pu erh.

3. Old tea tree

Old tea trees range from 200 to several hundred years old. Old tea tree leaves are mainly used to produce raw pu erh tea.

4. Wild tea tree

Wild tea trees are often thousands of years old, and produce superior flavor and after taste. It's considered the best you can get in Yunnan, although the prices can be very high even when the tea is just harvested. Wild tree leaves only used to produce raw pu erh tea.


While environmental conditions and age of the tree is very important, often times the skill needed to make a superior pu erh is often undervalued. In fact, mediocre leaves can still be turned into great tea with excellent processing. This all starts with growing and plucking leaves.

Growing & Fertilizers

The majority of Yunnan teas are grown with fertilizers. You'll get better quality raw material with organic fertilizers compared to artificial ones. However, even organic fertilizers are in some way 'unnatural'. As we said, leaves should grow slowly to acquire more flavor, and fertilizers only allow it to grow fast. Farmers using fertilizers are therefore mainly looking for quantity, not quality.

Herbicides are also often used to improve harvest. The use of this, however, isn't beneficial to the quality of the leaves. Not all farmers know this, and that's because demand for pu erh is so high that many new inexperienced farmers started producing this tea.

The secret lies in the ecology of the soil. Some weeds are an important part of the ecology around the tea tree. Good ecology, results in soil that has a proper amount of “rhizobium” which is a type of bacteria that transforms nitrogen from the air into nutritions that are important for the tea plant. By removing weeds, such beneficial bacteria will be gone with it.

Tea picking

When it comes to tea picking the first harvest in early spring is always the best, and then the 2nd and 3rd etc. But what matters even more is the frequency of plucking. Some farmers over-pick the tea trees for too many times a year. As a result, the tea trees have to work harder to produce the leaves. Such leaves will have less mineral content that produces the rich flavor and after taste that we're looking for!

Processing: Raw Versus Ripe

Once the tea leaves are picked, they're processed into loose leaf pu erh tea, also known as 'mao cha'. For picked leaves to become mao cha, they're first pan fried and dried under the sun. This process will allow the leaves to loose most of it water content.

  • Raw pu erh production: to produce raw pu erh, mao cha will be compressed into various shapes (mainly cakes) and stored for aging.
  • Ripe pu erh production: the production of ripe pu erh is different. The mao cha will be first piled up, sprinkled with water and covered with sheets. The tea master than makes sure to maintain a certain humidity level and temperature to allow the leaves to ferment faster. This process can take several weeks until the leaves are fully fermented. These loose ripe pu erh leaves are then compressed into cakes.


Both ripe and raw pu erh can be compressed into different shapes. Cakes or flat discs are the most popular, but many other shapes exist.

In theory, the shape has nothing to do with quality, and thus shouldn't affect the pu erh tea price. However, in practice, mini tuochas (tea in small dome shape) tend to be more often made from lower quality garden tea. Mini tuocha's are usually a few grams in size, and suitable to make one teapot of tea, which makes them very convenient for brewing

There's nothing wrong with mini tuochas though, it's just that they target a more commercial and young audience of tea drinkers that aren't that picky about tea (yet).

See below a video in which you can see how teas are compressed (into mushroom shaped pu erh) in a large tea factory. Unfortunately we aren't allowed to disclose in which factory we recorded this video:

Here's a similar video, but in this case the mao cha is compressed in to flat cakes:

Visit our pu erh tea category where you can see more shapes yourself.

When it comes to the price of pu erh, raw pu erh tea generally tends be more expensive, especially when they're aged for many years. This doesn't mean that one is better than the other. In fact, the flavors are so different that they can be regarded as different teas. Young people tend to prefer ripe pu erh, while older people love raw pu erh.

What is generally true, is that better raw materials are used raw pu erh that's meant for storage, simply because they age better and develop a better flavor.

The Market

Like stock markets boom and go bust, something similar can happen with prices of pu erh tea. Drinking pu erh became part of a popular lifestyle starting this Millenium. And in 2006-2007 the price of pu erh tea spiked to record levels. With such favorable prices, more people started to produce pu erh and an overwhelming quantity of low quality pu erh flooded the tea market. In 2008, the market suddenly cooled and merchant got stuck with stock that nobody could accept. Nowadays, the price is very acceptable and producers/merchants have learned their lesson.


August 18, 2016