Demand for matcha, the finely ground Japanese green tea powder, has gone through the roof. This dramatic increase has created the worst shortage ever seen, impacting producers and consumers globally. The increase is due to a rapid increase in tourism to Japan. It’s fueled by increasingly bad weather affecting harvests and growing international appetite for this highly-prized niche commodity. Industry insiders estimate that the shortage may last up to three years, leading to massive price increases and scarcity.
Professor Tan, an expert in tea production, explains that matcha production isn’t as easy as it might seem. It’s an intricate process that takes time. It takes about five years for new Camellia sinensis trees to mature before they can be harvested. High quality matcha is a specialty crop. Farmers only harvest it once per year and must shade the plants for at least three weeks beforehand. This technique develops the levels of chlorophyll and amino acids which are responsible for matcha’s glowing emerald color and delicious, complex umami flavor.
Rising Prices and Limited Supply
The effect of the shortfall is already being felt in the marketplace. At the first tea auction of the year in Kyoto, tencha prices rose almost 100% from the previous year. The price for the leaves used to make matcha just hit an all-time high of 8,000 yen, or roughly $87 per kilogram. Recent damage by adverse climate events including frost has hurt production capacity. AccuWeather Reports indicate that some areas of the Midwest have faced an unprecedented 30% drop in yield.
Yukino Matsumoto of a well-known matcha distributorship expresses concern about the future: “We’re all sharing the pain — producers, distributors like us and customers. Price is going to go up for sure.” Major producers such as Marukyu Koyamaen have halved their exports and recently announced 50-60% increases on their matcha products beginning this July.
Difficulties notwithstanding, the global hunger for matcha shows no sign of slowing. One representative from one of the big Japanese producers told me that overseas inquiries are going through the roof. They are well beyond Japan’s export goal of 15,000 tonnes by 2030. Even still, we often find it hard to put numbers to things. We’re actually rejecting orders that are disproportionately large, like those we received in instances of unprecedented demand from countries such as the United States, Germany and Dubai.
The Role of Tourism in the Shortage
Additionally, the increase in tourism to Japan after COVID-19 has further worsened the matcha shortage. Just in 2024, over 36 million foreign tourists traveled to Japan, including a record of 920,000 Australians. As for Anna Poian, she constantly sees tourists purchasing matcha by the pound to take home with them. Some sell it on the black market overseas, further increasing the lack of availability at home.
Except for the first time in history, we’re undergoing a matcha shortage – running since last fall,” Poian said. International travelers continue to surge, making for intense competition for existing inventory. Unfortunately, local producers and small businesses are racing to keep up with the rapid demand.
Elvan Fan, owner of Moon & Back Cafe, shares her experience regarding stock acquisition: “If I do not secure stock quickly, the next day you can’t get 500kg of matcha.” Even as Japan’s top producers work to set purchase limits to deter hoarding, many of the most sought-after matcha brands sell out almost immediately after they’re made available.
Adapting to Market Changes
As consumers adjust to the new realities of inflationary pressure and lack of inventory, many are looking for alternatives. Elvan Fan comments on shifting preferences: “Now people may have other choices. They can come to a coffee shop and grab a matcha as an alternative drink.” Still, she admits that once customers taste matcha, they’re often hooked.
Small tea farmers like Daniel Tan appreciate all the attention their quality teas are receiving. Unfortunately for most of them, they can’t keep up with the increasing demand. “I believe tea farmers in general are happy about the interest, but many cannot cope with the demand,” he stated.
Looking forward, Yukino Matsumoto expects continuing difficulties in obtaining sufficient supplies. We’re in daily contact with Japanese suppliers to help guarantee stock and began looking at new suppliers as well,” she said. Though the future is looking more promising, producers are still figuring out how to navigate the double whammy of climate impacts and intense global demand.
