Markets sometimes freeze. We saw that with devastating results in the market for mortgage-backed securities starting in 2007. Trading collapsed because people didn’t know how to value these assets properly. Holders of them don’t want to sell because they think they’re being lowballed, while buyers don’t want to offer more because they don’t think it’s worth any more. The lack of transactions sometimes make things worse, because without recent trades it’s even harder to evaluate how much these assets are actually worth, making the problem worse. So sometimes the default ends up being inaction. In the case of these securities, the ones who were left holding the bag ended up eating all the losses.

But this is a blog about tea. The reason I brought this up is because there’s a bit of a freeze going on nowadays as well in the market for aged oolongs in Taiwan. If you’ve been reading this blog for a long time you would know that I started seriously exploring this genre of tea beginning in 2007. Back then it was quite easy to find good aged oolong for a reasonable price. Unfortunately, that is no longer true. It’s harder now to come by decently aged (20+ years) oolongs for prices that are still pretty reasonable. People have been trying to hype up the market in recent years, leading to rising prices. China’s entry into this, of course, is a big factor, as with almost every other asset class on this planet. Chinese buyers are buying up old tea for no reason other than to have something different, and in this case they’re driving up prices here as well, just like with puerh.

There are some differences though. The first is that aged oolongs have no labels to go by, no cake shape to ponder, no wrappers and neifei to identify the tea. This means that one bag of aged oolong, at least from looks alone, don’t always look very different from another bag. Experienced drinkers can tell some clues from the dry leaves – their shape, their colour, their smell – that give you hints of what the tea is like, but for most people, this is pretty hard to do without a lot of contact with a wide variety of aged oolongs. It’s not easy. The lack of packaging means that unlike puerh, it is hard to say “I have this 30 years old competition grade oolong” that will easily convince another, probably less experienced buyer. The tea does all the talking and one is best to ignore any kind of information given to you by the seller.

This means that there’s always going to be a ceiling to the price of aged oolong – without the assurance of any kind of packaging, and with the wide variety of states in which an aged oolong can present itself, it is very hard for the common drinker to know what they’re buying, which means that people aren’t willing to pay a lot of serious money for it. Except in one case, that is – old competition teas. If you have a box of unopened 30 years old competition tea from Lugu, for example, it’s going to be worth some serious money. A jin can easily be $1000 USD or more. If the box doesn’t look like it’s been through a couple hurricanes, you can readily sell it for good money.

This creates a dilemma for the seller though. On my recent trip to Taiwan I talked to an owner of an old tea shop. He recently sold a bunch of these old competition teas to a collector/vendor for about $1200 a box each. Thing is, he has a couple bags of this tea left that is from the same year, but how should he price these? He wants to get the same money from selling these as he got from the boxed ones, because, as he claims, the tea is the same. I looked at the tea – it looks fine, smells fine, but at the price he’s quoting, it’s far too expensive. He even brewed some for me, just for sharing. It was decent, but honestly nothing too great. I’ve gotten far better, even in recent years, for a lot less money. Out of the packaging, aged oolongs just aren’t worth that much.

So instead he has these two aged oolongs he sells at a more pedestrian price (about $250 USD/jin) but which are really no good at all – it’s got a moldy smell and just isn’t very pleasant to drink. Because of the prices he was able to sell his other teas at, however, he has good reason to feel this is perfectly reasonable. I can see why, although I honestly don’t think anyone should buy these aged oolongs at these prices.

I also encountered a tea farmer who sold some family aged teas for a similarly high price, partly because the family is somewhat famous in the Dong Ding area. So, even for his 5 years old tea that barely tastes like aged anything at all, he also wants the same high price. What is someone supposed to do with that?

There’s also the aforementioned old tea competitions now – new competitions of aged teas. So instead of selling to random people, many vendors simply prefer to enter their aged oolong into these competitions. If the tea is decent, then they’re pretty much guaranteed at least a low ranking in these, which means getting official packaging, which also means that people then are much more willing to pay a higher price for the tea. So why sell it at all? Since the category is aged tea, just enter some this year, enter some next year, until you run out of your supply. It’s really pretty easy to do.

In the meantime, there’s an endless parade of stuff that is subpar – sour tea, badly roasted tea, moldy tea, stuff that isn’t really aged but pretending to be, etc. The possibilities are endless, and many of them are being peddled as aged oolong. Some of them make their way to Western vendors, at prices that are quite high but at qualities that are not. Many others are being sold locally at shops that tell a good tale. Either way, the consumers suffer. It’s too bad, but it’s all too common.

So, unlike some years ago, finding good aged oolong is no longer easy. It’s possible, but prices are now higher, and the quality is generally lower. When you find the good stuff, the vendor often doesn’t even want to sell. I guess that’s true almost universally for all things tea in the past ten years. It’s just sad to see that this is happening to the type of tea that I love to drink.