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Pu'er tea is unlikely to see a dramatic price increase as a result of damage to factories by an earthquake in Ning'er, Yunnan Province, according to market watchers.

"It's likely that the sale of Pu'er tea will be affected by the earthquake, which has devastated its largest trading market and a dozen major companies producing and selling tea there," Zou Jiaju, secretary-general of the Yunnan tea association, said.

"But whether the tea price will rise dramatically again is uncertain at the moment given that the overall price of Pu'er tea actually dipped in May.

"We do not expect to see any big jump or fall in the price (of Pu'er) as it will be no good for the tea market," Zou said.

The "antique" tea is known for its unique fragrance, which grows stronger the longer it is preserved. It is also thought to have health benefits.

The price of Pu'er has been rising since 2003, with many buyers collecting the tea instead of drinking it. A block of ordinary compressed Pu'er tea sold for 6 yuan (77 cents) 10 years ago, but is now worth 100 yuan ($13).

But the price began falling in May after several quality scandals and an excessive amount of tea labeled Pu'er flooded the market. Price fluctuations have caused concern in the industry.

"The price of Pu'er tea has risen too far from its actual value as a result of hype (as to its health benefits) from business and investors," said Yang Sizhong, a professor at Yunnan University. "Despite claims about its health effects, it is still only a soft drink that may lose its taste and effects without proper preservation."

Some companies have sold poor-quality Pu'er or tried to pass off freshly picked tea as aged Pu'er, Zheng Bingji, chairman of the Yunnan Pu'er Tea (group) Ltd, said.

"Such illicit behavior will seriously harm the growth of the Pu'er tea industry," Zheng said.

Luo Shaojun, director of the National Inspection and Examination Center for Teas, said the hype about the tea's health benefits was not necessarily negative, provided it helped stimulate industry development.

"But all market players should strictly abide by market rules and ensure the product's quality and safety meet all of the criteria," Luo said.

Some experts blame the Yunnan provincial government for promoting its tea business without streamlining the market.

While Pu'er tea should only refer to the post-fermented variety, a new standard set by the provincial government in 2006 allows for other teas to sit within the Pu'er category, Zou said.

"This new standard seems to facilitate the industrialization of the tea market, but actually it compromises the overall quality of the tea and will harm its reputation long-term," Zou said.

(China Daily 06/08/2007 page5)