Rising global demand for matcha is causing supply shortages in Japan and pushing raw material prices to record highs.
This trend signals a shift in the traditional tea market as the beverage transitions from a regional specialty to a global commodity. The resulting scarcity threatens the availability of high-grade tea for both domestic consumers and international retailers.
At a recent auction in Kyoto, tencha — the raw material used to produce Uji matcha — reached a record price of $87 per kilogram [1]. This represents a significant increase from the previous year, when the price stood at $51 per kilogram [2].
The JA Zennoh Kyoto Ujicha Distribution Center, which represents Japan's tea industry, said the imbalance is driven by a surge in popularity in markets such as New York, where matcha is increasingly integrated into mainstream diets and beverage menus [1].
Production capacity in the Uji region has struggled to keep pace with this rapid expansion. Because tencha requires specific shading techniques and labor-intensive processing, the supply cannot be scaled as quickly as the global appetite for the powder has grown [1].
Industry observers said the shortage is creating a competitive environment where buyers must pay premium rates to secure consistent shipments. The gap between the current $87 price point [1] and the prior $51 rate [2] highlights the volatility of the current market.
“Tencha auction prices hit a record $87 per kilogram.”
The record-breaking price of tencha reflects a structural supply-demand imbalance. As matcha becomes a staple in Western health and wellness trends, the traditional, slow-growth agricultural methods of the Uji region are becoming a bottleneck. This may lead to increased price volatility for consumers and could incentivize the industry to explore more efficient production methods or expand cultivation areas to stabilize the market.
