Why is there a matcha shortage?

Three primary factors. First, the global matcha boom has pushed demand far beyond production capacity. Second, extreme summer heat in 2024 damaged tea bushes, reducing tencha (matcha raw material) yields. Third, aging tea farmers and accelerating farm closures are shrinking the production base itself.

When will matcha prices come down?

Most industry observers expect supply to somewhat improve by late 2026 to early 2027, but a return to previous price levels is considered unlikely. Tencha field conversions should gradually increase production, but given farm closures and climate volatility, stabilization at a new, higher price baseline is the more realistic scenario.

How does Chinese matcha differ from Japanese matcha?

Japanese matcha is processed using steam fixation (mushisei), producing a vivid green color and rich umami flavor. Chinese powdered green tea typically uses pan-firing, resulting in a different flavor profile. Additionally, Japanese matcha production involves 20–30 days of shade-growing (covered cultivation) to boost L-theanine and chlorophyll levels — a labor-intensive step that many products marketed as matcha overseas do not undergo.

Is the rise in sencha prices related to the matcha boom?

Directly. Because tencha commands higher per-kilogram prices than sencha, many sencha farmers are converting their fields to tencha production. This reduces sencha supply, driving up procurement costs. The effect cascades into bottled tea and everyday tea products. In Kagoshima, autumn-winter bancha prices surged roughly six-fold year-on-year.

Japan's Matcha Exports Surpass 10,000 Tons for the First Time in 71 Years

In 2025, Japanese tea exports broke through the 10,000-ton mark for the first time since 1954 — a gap of 71 years. The driving force behind this milestone? Matcha, without question.

But beneath the headline figures, a structural transformation is quietly reshaping the industry. Tencha (the raw leaf material ground into matcha) supplies are running critically low, prices have surged to historic levels, and sencha farmers across Japan are racing to convert their fields. The era of affordable, readily available matcha is drawing to a close.

Data in this article is sourced from the Japan Tea Export Promotion Council, Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF), and the Global Japanese Tea Association, among other public sources. Where market size figures are estimates, the originating research firm is cited.

10,000 Tons After 71 Years — What Happened

The Export Surge

Between January and October 2025, cumulative Japanese tea exports reached 10,084 tons (Source: Kyodo News / Ryukyu Shimpo). The last time annual exports surpassed the 10,000-ton threshold was 1954.

Powdered green tea — the category that includes matcha — accounted for the overwhelming majority of that growth.

10,084 tons

Japanese Tea Exports (Jan–Oct 2025)

8,718 tons

Matcha Export Volume (2025)

Approx. $267 million

Matcha Export Value

Top 3 Export Destinations

The United States dominates the landscape. But where exactly is all this matcha going?

Top 3 Japanese tea export destinations, Jan–Oct 2025 (Source: Japan Tea Export Promotion Council)

Destination	Volume Share	Primary Uses	Growth (YoY)
United States	~40% (3,497 tons)	Matcha lattes, confectionery, supplements	Export value +91.1%
Taiwan	~20%	Leaf tea (sencha) dominant	Steady growth
EU & UK	~15%	Powdered tea for cafes & food manufacturers	Export value +197.3%

The EU's explosive growth stands out. Export value to Europe nearly tripled year-on-year, driven by procurement from European cafe chains and food manufacturers.

The Supply Crisis — Why There Is Not Enough

Tencha Reserves Are Depleted

Matcha is made by stone-grinding tencha leaves. While tencha can be stored under refrigeration, the 2024 demand surge depleted most producers' reserves (Source: Tezumi).

During the 2025 first-harvest season, Kyoto's tencha production fell to 87% of the prior year. The volume reaching Kyoto's JA Zennoh market tells the story:

2024: 10,216 kg
2025: 6,140 kg (down approximately 40%)

Kyoto's Uji district is renowned as the origin of Japan's highest-quality matcha, yet it has experienced the steepest supply decline. First-harvest tencha transaction prices surged from approximately 5,500 yen/kg in 2024 to 14,333 yen/kg in 2025 — roughly a 2.6x increase (Source: Uji Matcha Tea).

Three Structural Factors

The shortage is not simply a short-term supply-demand gap. Structural forces are compounding the problem.

1. Extreme Weather Is Becoming the Norm

The intense summer heat of 2024 damaged tea bushes across Japan
Industry insiders described the weather conditions as "terrible" (Source: Tokyo Cheapo)
Climate change is expected to continue destabilizing production volumes

2. Aging Farmers and Farm Closures

Tea farm closures reached a record high in 2025 (Source: Teikoku Databank)
Rising costs for fertilizer, fuel, and logistics are squeezing margins
A growing number of farms are abandoning autumn and winter harvests entirely

3. The Rush to Convert from Sencha to Tencha

Tencha commands higher prices per kilogram than sencha, accelerating field conversions
In Shizuoka, the current sencha-to-tencha ratio is 8:2, but it could eventually invert as it has in Uji (Source: TEA ENERGY)
The result: sencha supplies are also declining, pushing up prices for bottled tea beverages

At Kagoshima's tea market, the average price of autumn-winter bancha reached 2,542 yen/kg in October–November 2025 — roughly six times the previous year's price (Source: Kyodo News). The price surge extends well beyond matcha into everyday tea.

Matcha Quality Grades and Price Movements

Not all "matcha" is created equal. Supply conditions and price impacts vary dramatically by quality grade.

Matcha supply and pricing by quality grade, 2025 (compiled from various industry reports)

Grade	Primary Use	Price Range (2025)	Supply Status	Price Change
Ceremonial (Top Grade)	Tea ceremony, gifts	100g: $25–75	Extremely tight	+150–265%
Thick Tea (Premium)	Tea ceremony, specialty cafes	100g: $15–40	Tight	+100–150%
Beverage Grade	Cafe lattes, drinks	1kg: $20–40	Somewhat short	+50–80%
Food Processing	Confectionery, ice cream, supplements	1kg: $10–20	Procurable	+30–50%

The key takeaway: the higher the grade, the more severe the impact. Ceremonial-grade matcha depends on a limited number of producers in Kyoto's Uji and Fukuoka's Yame districts, with no viable substitutes. Food-processing grade, by contrast, can be sourced more broadly from large-scale production areas like Kagoshima.

A 71-Year Timeline — The History of Matcha Exports

Why "71 years"? The historical context reveals how Japan's tea export story unfolded.

1859

Treaty Ports Open — Tea Exports Begin

Following the opening of Yokohama port, Japanese tea became a major export commodity. Shizuoka emerged as the primary production hub. At peak, annual exports exceeded 20,000 tons.

1954

Exports Reach 10,000 Tons

Post-war recovery pushed exports above 10,000 tons. However, a shift toward domestic consumption and declining overseas demand led to a prolonged export slump.

2000s

The Matcha Boom Takes Root

Starbucks matcha latte became a global hit. The word Matcha began entering the English lexicon as a common noun.

2020

COVID-19 and the Health Trend

At-home matcha consumption surged. Matcha content went viral on social media. Annual export value surpassed 10 billion yen (~$67M).

2024

Supply Shortage Becomes Visible

Demand growth outpaced production capacity. Tencha reserves were depleted. Prices began climbing.

2025

10,000 Tons — The 71-Year Record Falls

Cumulative exports reached 10,084 tons in the first 10 months. Matcha accounted for approximately 87% of the total. Prices hit historic highs.

The Global Matcha Market — How Big Can It Get?

Market Size Estimates

Major research firms have published varying estimates for the global matcha market.

Global matcha market size estimates (from 2025–2026 reports by each research firm)

Research Firm	2025 Estimate	2026 Forecast	CAGR
Mordor Intelligence	$3.67B	$3.91B	6.47% (through 2031)
Market Data Forecast	$4.05B	$4.41B	8.90% (through 2034)
Fortune Business Insights	$2.32B	$2.50B	Not disclosed
Research Nester	$3.13B	$3.29B	Not disclosed

The variance reflects differences in scope (powdered green tea broadly vs. matcha specifically) and definitional criteria. That said, every research firm agrees on one point: the market is expanding.

Three Trends Driving Growth

Health consciousness goes mainstream: Global interest in antioxidants and L-theanine continues to grow
Social media as cultural catalyst: Matcha-related content goes consistently viral on TikTok and Instagram
Expanding applications: Beyond beverages into skincare, supplements, and food manufacturing

The 2026 Outlook — When Will Supply Normalize?

Short Term (First Half of 2026)

The shortage continues: As of February 2026, tea shops in Tokyo's Ueno district were still limiting purchases to "one tin per customer" (Source: Tezumi)
2026 new-tea transaction prices: Expected to rise at least 1.5x above the already "abnormally high" 2025 levels (Source: Nihon Nogyo Shimbun)
Sencha price pass-through: Major beverage companies are raising bottled tea prices in succession

Medium Term (Late 2026–2027)

Most industry insiders expect supply to "somewhat improve" by late 2026 to early 2027
However, this does not mean a return to previous prices — rather, stabilization at a new, higher baseline
Tencha field conversions should gradually increase production volumes over the medium to long term

Supply "normalization" does not mean prices returning to former levels. Given the structural shifts — field conversions, farm closures, climate volatility — matcha prices are likely settling at a permanently higher baseline. Business models built on procuring large volumes of cheap matcha face a fundamental reckoning.

Business Impact — A Turning Point for Japan's Tea Industry

Opportunities

Shift to a quality-first strategy: The transition from volume to value rewards producers who compete on quality
Regional branding: Differentiation by origin — Uji, Yame, Kagoshima — becomes a viable strategy
Organic premium: Tencha with EU organic certification commands significantly higher prices
Direct-to-consumer exports: Beyond B2B wholesale, D2C channels to overseas consumers are now realistic

Risks

Rise of Chinese matcha: Japan's supply shortage is creating market space for Chinese and Korean "matcha" products
Ambiguous quality standards: The global market is expanding without an internationally recognized definition of "matcha"
Farmer burnout: Farms that rushed into tencha conversion may suffer losses when supply-demand rebalances
Domestic consumer impact: Rising prices for everyday sencha and bancha raise the specter of Japanese consumers being priced out of their own tea

Frequently Asked Questions

The Era of Cheap Matcha Is Over

The first 10,000-ton export year in 71 years is unquestionably positive news for Japan's tea industry. But behind that milestone, a structural mismatch between supply and demand is deepening.

To summarize:

Export volume: 10,000+ tons for the first time since 1954. Matcha accounts for approximately 87%
Prices: Tencha prices up 2.6x; autumn-winter bancha up 6x
Supply: Kyoto tencha market volume down 40%. Reserves depleted
Structure: Record farm closures. Accelerating conversion from sencha to tencha
Outlook: Some improvement expected by late 2026, but a return to former price levels is unlikely

This transformation is also a significant opportunity for producers and businesses committed to quality and provenance. The industry is pivoting from competing on volume to competing on quality, story, and traceability. How Japan's tea industry navigates this turning point will define its next chapter.