Matcha Prices Soar Amid Record Heat and Global Demand Surge

Matcha prices have skyrocketed to historic highs as Japan’s record-breaking heat slashes green tea yields, tightening supply while global demand continues to surge. The Kyoto region, responsible for about 25% of Japan’s tencha production—the raw material for matcha—suffered under extreme heat in 2023, Japan’s hottest year on record, severely impacting the recent harvest.

Masahiro Yoshida, a sixth-generation tea farmer in Uji, reported a 25% drop in output, harvesting only 1.5 tons of tencha compared to his usual two. “The summer heat damaged the bushes, so we couldn’t pluck as many leaves,” he told Reuters.

Fueled by health-conscious millennials and Gen Z consumers, matcha has exploded in popularity worldwide, praised for its antioxidants and high caffeine content. Viral social media trends and demand from trendy cafés offering matcha lattes, smoothies, and desserts have pushed global interest to new heights.

Singapore-based wholesaler Tealife saw a ten-fold increase in customer demand last year, forcing founder Yuki Ishii to occasionally limit purchases. “I’m basically always out of stock,” he said.

Despite a 2.7-fold rise in Japan’s tencha production over the past decade to 5,336 tons in 2024, the Japanese Tea Production Association warns of lower output this year. In May, Kyoto tencha auctions hit a record 8,235 yen per kilogram—a 170% year-over-year spike and well above the previous 2016 high of 4,862 yen, according to the Global Japanese Tea Association.

Export data backs the trend, with Japan’s green tea exports rising 25% in value to ¥36.4 billion ($252 million) in 2024, largely driven by matcha. However, new tea fields require five years to mature, meaning the current shortage won’t ease soon.

“I suspect we’ll see even more dramatic price increases,” said Marc Falzon, a U.S. matcha importer.