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FAQ - Why is Yiwu tea so expensive?

So this blog post title is based on one of the most common questions I get from potential customers or other interested parties. With the best single-estate teas from Yiwu increasing price at source, almost year on year, I feel like it's worthwhile trying to share my own experience in this topic using more detail than is feasible in a message or short email.


In this article, I will first summarise, in part 1, the main points which factor into the general price and then, in part 2, I hope to explain some more nuanced points with relation to our teas.



[TL:DR] To over-simplify, certain Yiwu teas have an exceptionally high demand exacerbated by a poor supply causing their market price to be much higher than most other regions and popular terroirs. The people who recommend single-estate teas appreciate those teas differently from people who strongly recommend drinking blends.



Part 1: How is tea valued?

When thinking about the particular value of tea, there are actually many different aspects of tea that relate to the value and these can be explained in different ways using different perspectives. In this part of the blog, I am going to summarise using the simplified perspective of reduced supply and/or increased demand as the main market forces for increasing pricing.


Appearance/Smell

Whilst producers may or may not have enough direct financial incentives to produce teas with a more desirable appearance and aromatic dry leaf characteristics, it is often those teas that will have more comparative value at the latter end of the supply chain. After all, it is typically much easier to teach a consumer to appreciate the appearance and dry leaf aroma than it is to teach them about the other aspects of value, so many producers increase the demand for their 'low-quality teas' by focusing on these aspects of their products.


An experienced trader or tea drinker will typically be able to make some initial judgment about a tea by the appearance and smell of the leaves and or packaging. For the leaves, the picking standard/style, processing, storage, and indicators related to the specifics of these can strongly affect the marketability. An example of this is the price of Huangpian vs. the graded Maocha of the same production - some customers may actually prefer the taste of Huangpian but the overall supply/demand ratio for it is indeed very much lower.

Photos: Gaoshan Gushu 2021 Spring Maocha vs. Gaoshan Gushu 2021 Spring Huangpian


Another aspect to consider is that packaging can heavily influence the demand for the actual tea, even sometimes in spite of the contents. For example, luxury packaging may multiply the perceived value several times over whilst on the other hand, some (especially older) buyers appreciate simpler, more traditional packaging and refuse to buy modern packaged products. This is a good example of how the market fragments once more nuance has been brought into these observations.


Brand/Reputation

Another factor related to packaging is the influence of a famous brand or the reputation of a specific tea. In the online marketplace, where the market is particularly fragmented, a good, visible brand or reputation can influence demand for a tea much more than any other factor in this list. Word of mouth recommendations are particularly important, and arguably even more so in the world of tea where more and more options are seemingly popping up every day. In a similar way, a plain white wrapper tea can be recommended by one or more influential members of the tea community and that could potentially cause demand to skyrocket well beyond available supply. A good market example of brand usage is the influence and marketability of different products from Menghai Tea Factory or their modern day brand name, Dayi (大益). A Dayi-branded modern Yiwu blend will almost certainly be priced much higher than its best single-estate composite leaf direct from producers. It's also important to note that blended cakes are a very different animal to single-estate and even different vendors create their own brand value due to the different preferences on their single estate teas too.

Pictured: Some products by Menghai Tea Factory


Availability/Accessibility

In specific regions, particularly when talking about specific ancient trees gardens of Yiwu, there are a limited number of trees and their limited accessibility deep in the forest means that they produce a limited amount of tea each season, especially when compared to younger, more densely packed smaller trees. This lack of supply compared to the consistent, exponential growth in demand means that prices have increased year on year for the most exclusive productions. The differences between high production gardens and low production areas are extreme, typically showing two or three extra digits on the price of the most popular trees, which in turn is compared to fewer digits in terms of production quantity.


Terroir/Varietal

Actually, there are comparatively a lot of ancient trees all over Yunnan and other parts of southeast Asia. However, each region produces different teas and not all are recognised for their qualities in the same way. In general, the forested mountains of Xishuangbanna, whether Yiwu or Menghai, have had higher demand and therefore prices in recent years, but as micro-terroirs or even single trees are being picked out for their unique qualities, the specific supply/demand ratio changes dramatically. We can now see specific micro-terroirs or single trees being marketed in a way that was technically impossible to trade with the mass-market as few as ten years ago but, fakes aside, they are now being made available to collectors and even the open-market as the puer enthusiasts now specifically seek to experience these specific teas. Of course, this brings forward the issues of transparency and trust which are often also limited in supply.