Pu'er tea a wonder cure for diabetics

By Ye Jun (China Daily)

A sip of Pu'er tea can be as helpful as drugs in lowering blood sugar and preventing diabetes, says a recent press briefing by the Pu'er city government. That is the finding of scientists at Jilin University and the Changchun Science and Technology University, after two years of studies organized by Pu'er city, Yunnan province.

The provincial government's Science and Technology Department also organized a forum for health experts to discuss the health benefits of Pu'er.

"Owing to Pu'er tea's obvious effect in restraining some enzymes related to diabetes, the experts believe drinking the right amounts of Pu'er tea can help lower blood sugar levels and prevent diabetes to some extent," says Sheng Jun, deputy mayor of Pu'er city.

The first phase of the study involved 20 genetically obese lab rats with very high blood sugar levels. Researchers fed 10 of them with regular amounts of mature Pu'er tea while the other 10 rats were not given any.

"Only two rats of the group not fed any tea, survived after 11 months. The others became infected and had sores before dying," says Sheng. "Meanwhile, all the 10 rats that drank Pu'er tea survived, and showed no trace of sores or infection."

The research team also compared Pu'er tea with Rosiglitazone, a widely used medicine to lower blood sugar levels. After two weeks, they found that the rats that were fed Rosiglitazone had 36.5 percent less blood sugar, while the figure was 42 percent for the group that was fed Pu'er tea. Also, those on Pu'er lost weight while those on the drug showed no evidence of any weight loss.

The researchers carried out a test among 120 diabetic volunteers. They were asked to drink Pu'er regularly and stop their medicines, while making no change to their dietary habits. Seventy percent reported blood sugar levels lowered to below 7 mmol/L, with an average decrease of 35 percent.

Although all teas are believed to be capable of lowering blood sugar levels, Pu'er and oolong are thought to be the most effective. In fact, they sometimes lower blood sugar level so fast that some people feel weak in the limbs, experience a faster heartbeat and even feel dizzy - all signs of too low a blood sugar level. The Chinese refer to such people as zui cha, or tea drunk.

Sheng Jun reveals that Yunnan has one of China's best longevity rates and attributes this to tea drinking. "Moreover, as Yunnan has the lowest incidence of cancer, Pu'er city has the lowest number of cancer patients in Yunnan."

The city has applied for a patent for its research into the health benefits of Pu'er, and will continue with its tests.

Puer Tea: China's Next Hot Commodity?

By EMILY RAUHALA / HONG KONG

There is Champagne, France; Tequila, Mexico; and Parma, Italy — all places turned trade names known for their unique, high-quality foods. Now, if China has its way, there could be another: Puer.

This lush corner of Yunnan province in China's south is home to one of the world's hottest teas. Puer tea may not look like much — it is typically sold in heaps resembling cow patties — but one mug of these aged leaves can fetch up to $1,000. The drink is touted for its health benefits and is loved for its light, earthy taste. It is already a hit in Hong Kong, where rare teas are a status symbol among the city's élite, and it is generating hype outside China, too. Three high-profile Silicon Valley techies recently tweeted and blogged their way through a Puer tea tour of Yunnan. Dieters, meanwhile, are buzzing about rumors that Victoria Beckham, the svelte former Spice Girl, drinks Puer to lose weight.

Making Puer tea as internationally renown as Roquefort cheese could expand China's tea exports while adding a bit of luster to a food industry infamous for its health scandals. But building a Puer brand will depend on getting control of a market riddled with imposters, financial speculation and controversies.

The need for stricter control of the Puer industry became clear two years ago, when the Puer market went on a destabilizing roller-coaster ride. Some Chinese buy tea as an investment, much like Europeans buy wines. In the early part of the decade, thousands of cash-rich urbanites poured their savings into the Puer, causing prices to double, then triple. "People were buying anything," says David Lee Hoffman, a California collector. By 2007, the finest aged Puer was — quite literally — worth its weight in gold. As demand soared, however, quality suffered, fakes flooded the market and prices fell.

That's when Beijing stepped in. In an effort to restore confidence, piracy-prone China tightened controls to define exactly what should be considered real Puer. As of December 2008, only teas produced in Yunnan province's 639 towns and 11 prefectures and cities can be labeled "Puer." Branded tea must also be made with a certain type of leaf, using specified technology. Yunnan leaves aged outside the province are no longer considered authentic. The goal, officials say, is to protect Yunnan's heritage and build an internationally viable, niche brand.

Not everyone welcomes the rules. It is unclear if other Chinese provinces will adhere to the regulations and grow different teas under new names. The new standards, for example, shut out tea producers in neighboring Guangdong province, who claim that the tea they process is as authentic — perhaps even more so — than Yunnan's. Guangdong tea makers contend that it was Pearl River traders, not Yunnan farmers, that originally perfected Puer. Zheng Mukun, a tea master from Guangdong, says the province's claim dates to the Qing dynasty, when tightly packed leaves were fermented over the course of the three-month journey, by horse, from Kunming to Guangzhou. The blackened leaves became popular in Hong Kong and industrious southerners began to experiment with fermentation. At the 1957 Canton Fair, Zheng says, local tea masters shared their recipes with colleagues from Yunnan. Ever since, the provinces competed to produce the best teas. Earlier this month, at a trade fair in Hong Kong, a table of Guangdong tea vendors called the regulations "unfair" and "ridiculous."

Experts also have doubts that Chinese regulators can get enough control over the Puer market to build a premier brand. Beijing's standards only apply to domestic producers; competitors in Vietnam, Sri Lanka and Burma can continue to grow and sell their own "Puer" tea. Hoffman, the collector, predicts that fakes will persist and urges caution. "This has always been a buyer-beware market, and it will always be thus," he says.

Still, Hoffman is confident the industry can thrive — and he's put money on it. This fall, he plans to open a luxury tea shop in California that will be a gathering place for American aficionados and a showcase for his fine, aged Puers. "There is a lot of hype and marketing, but that doesn't interest me," he says. "I am only interested in taste." People have offered to buy his collection, but he's dismissed them in turn. He wouldn't trade it now, he says, not for all the tea in China.

A County in China Sees Its Fortunes in Tea Leaves Until a Bubble Bursts

By ANDREW JACOBS
Published: January 16, 2009

MENGHAI, China — Saudi Arabia has its oil. South Africa has its diamonds. And here in China’s temperate southwest, prosperity has come from the scrubby green tea trees that blanket the mountains of fabled Menghai County.

Over the past decade, as the nation went wild for the region’s brand of tea, known as Pu’er, farmers bought minivans, manufacturers became millionaires and Chinese citizens plowed their savings into black bricks of compacted Pu’er.

But that was before 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 to survive the implosion of the Pu’er market. “A lot of people behaved like idiots.”

A pleasantly aromatic beverage that promoters claim reduces cholesterol and cures hangovers, 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. From 1999 to 2007, the price of Pu’er, a fermented brew invented by Tang Dynasty traders, increased tenfold, to a high of $150 a pound for the finest aged Pu’er, before tumbling far below its preboom levels.

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. Many investors were led to believe that Pu’er prices could only go up.

“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.”

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.

In the mountainous Pu’er belt of Yunnan, a cabal of manipulative buyers cornered the tea market and drove prices to record levels, giving some farmers and county traders a taste of the country’s bubble — and its bitter aftermath.

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.

“Very few of us survived,” said Mr. 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.

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.

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.

When values hit absurd levels last spring, the buyers unloaded their stocks and disappeared.

“The market was sensationalized on purpose,” Mr. Wu said, speaking in a telephone interview from Beijing.

With its near-mythic aura, Pu’er is well suited for hucksterism. 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.

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.)

But with no empirical way to establish a tea’s provenance, many buyers are easily duped.

“If you study Pu’er your whole life, you still can’t recognize the differences in the teas,” said Mr. Wang, the tea buyer. “I tell people to just buy what tastes good and don’t worry about anything else.”

Among those most bruised by the crash are the farmers of Menghai County. 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.”

Last week, 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.

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.

“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.”

A trader who jumped into the business three years ago, Mr. 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.”

China's Tea Boom & Bust

Tea has been one of China's main cash crops for the last decade. About 23,000 tons of Pu'er tea was produced in 2007. With the advantages of being a cholesterol reducer and its overall beneficial health effects, Pu’er tea became one of the greatest investment frenzies in China's economy since 1999, according to the New York Times.

During the boom, prices rose to record levels — allowing rural farmers to buy cars, build homes and send their children to school. Chinese citizens who put most of their savings into this "liquid gold" made millions of dollars during the boom era. Wholesalers started paying up to 30 percent more than they did the previous year — while production doubled to 100,000 tons from 2006 to 2007. We posted about the rise of Pu'er tea and its impact on tea workers last April, during the height of the boom in Fortune in the Tea Leaves. About 9 months later, it's a very different story.

By mid 2008, wealthy Chinese started to feel the pinch of the global economic crisis and the tea traders that used to buy up the cash crop in mass simply stopped coming. As the tea bubble popped, there was a devastating drop in prices. The going rate for Pu'er is now $3 a pound — a tenth of its peak price. More than a third of the 3,000 tea manufacturers and merchants have left the tea trade, according to the New York Times. The worst affected have been the farmers, many of whom have switched from tea to more lucrative crops like rice and corn.

Experts are comparing China's tea market to the U.S. housing bubble — where house prices rapidly increased to unsustainable levels, followed by a rapid decline in prices, which left many homeowners owing more on their mortgage than the market value of their homes.

Yet Chen Li, a former trader in the tea market believes that prices will eventually rebound and finds optimism in the mounds of unsold tea held by farmers and manufacturers. In an interview with the New York Times he says, "The best thing about Pu’er is that the longer you keep it, the more valuable it gets.” Yet if the "tea bubble" is anything like the housing bubble in the U.S., we may not see a rebound for a long time to come.

February 10, 2009 by Manasi Sharma