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BEIJING (Reuters) - Those nursing losses in their stock portfolios should spare a thought for Chinese investors who piled into the tea market in one of the more frenzied and bizarre speculative bubbles last year.
The price of puer tea, a fermented variety from the country's southwestern Yunnan province, has crashed under the weight of overproduction and a vastly diminished appetite for exotic assets.
Puer tea has shed 85 percent of its value since peaking in May last year, industry watchers said on Tuesday. That is even worse than the Shanghai stock market, which has tumbled nearly 70 percent from a record high scaled 14 months ago.
"People who did not really understand the industry have been hit the hardest," said Yong, the representative of a puer trade website (cnpuerh.com) based in Xishuangbanna, a mountainous region in Yunnan that produces the tea.
Yong, who did not want to give his first name, said many of the tea farms that turned to puer when it was the darling of investors have quit the business.
Connoisseurs of the slightly bitter tea, though, are not necessarily grieving the loss.
"The price is very low, so farmers have stopped managing their crops so intensively. They use less fertilizer, less pesticide," Yong said. "This actually means the quality now is very good."
Back in the heady days of puer investment, people paid astronomical sums for the tea, which is sold in hard-packed bricks and tastes best when aged like fine wine.
A 100g (3.5 oz) brick of 60-year-old puer sold for 300,000 yuan ($39,400) last February, state media reported.
Declared a tea for emperors during the Qing dynasty, puer's popularity today is driven in large part by China's new rich for whom it is one trapping of the good life.
Geng Xiaolu, manager of Jiuquxi Tea House in Beijing, said her framed work of puer art remained the prized piece of her tea collection, regardless of market fluctuations.
Hard puer bricks can be sculpted into small reliefs, and Geng held a fine example in her hands: nine scaly dragons twisting across each other.
"I don't care if it's worth only one penny. I would never sell it," she said.
Reporting by Simon Rabinovitch; Editing by Ken Wills