In April 2025, first-flush tencha — the shade-grown leaf that is stone-milled into matcha powder — sold at Kyoto’s JA cooperative auction for ¥14,333 per kilogram. One year earlier, the same grade had traded at ¥5,500. That 265% surge was not an anomaly. It was a structural signal: Japan’s matcha industry is entering a supply crisis with no quick resolution.
For tea importers, food manufacturers, and procurement teams sourcing matcha globally, the implications are immediate and significant.
The Price Data
| Tencha Grade | 2024 (¥/kg) | 2025 (¥/kg) | Change | Source |
|---|---|---|---|---|
| Kyoto first-flush, machine-harvested | 5,500 | 14,333 | +160% | Kyoto Shimbun |
| Kyoto average, machine-harvested | 4,862 | 8,235 | +69% | Japan Tea Association |
| Uji hand-picked tencha | 20,024 | 43,330 | +116% | Kyoto Shimbun |
| Kagoshima sencha (benchmark) | ~400 | ~1,300 | +225% | Toyo Keizai |
Japan’s green tea export value reached ¥72.1 billion in 2025, a 98% year-over-year increase. Matcha and powdered tea now account for 69% of all Japanese tea exports, up from 58% two years prior.
Root Cause: A Demographic Crisis, Not a Weather Event
This is not a cyclical disruption. The underlying cause is structural and irreversible in the near term.
Japan’s tea farm count collapsed from 53,687 in 2000 to approximately 12,000 in 2024 — a 77% decline over two decades. Among remaining farmers, over 70% are aged 65 or older. Fewer than 1,500 active tea farmers nationwide are under 49.
Cultivated tea acreage has shrunk 29% in the past decade. First-flush production in 2025 fell 10-20% nationally, with Kyoto’s hand-picked tencha — the highest grade — down an estimated 40%.
The arithmetic is stark: global matcha demand is approximately 12,000 tonnes annually. Total global production stands at 4,000-5,000 tonnes. The structural deficit of 7,000-8,000 tonnes per year continues to widen as demand accelerates and Japanese domestic production contracts.
Industry Response
Major industry players have already moved to reprice:
- Ito En, Japan’s largest tea company, raised prices on 19 matcha product lines by 50-100% in September 2025.
- Coca-Cola Japan followed with price increases on its Ayataka green tea brand in October 2025.
- Specialty tea retailers in Tokyo have introduced purchase limits — one canister per customer for premium ceremonial grades.
- Japan’s Minister of Agriculture, Forestry and Fisheries personally visited a matcha specialty cafe on April 9, 2026, publicly endorsing government support for “export destination diversification.”
China’s Expanding Role
While Japan’s production capacity contracts, China has quietly become the world’s largest tencha producer.
Chinese tencha output reached approximately 5,000 tonnes in 2025, representing roughly 60% of global supply. Guizhou province alone accounts for an estimated 2,500 tonnes, with the Guitea Group (贵茶集团) completing one of the first significant Chinese tencha shipments to Japan through Shimizu Port in early 2025.
The price differential is substantial. Industrial-grade Chinese matcha trades at $15-35/kg compared to $40-70/kg for equivalent Japanese product — a 30-50% cost advantage at current rates.
For food-service and industrial applications — matcha lattes, confectionery, ice cream, and ready-to-drink beverages that constitute the bulk of global volume demand — the sourcing shift from Japanese to Chinese supply is already underway.
What This Means for Buyers
1. Premium ceremonial matcha will remain Japanese-origin and increasingly expensive. Budget accordingly for high-end product lines.
2. Food-service and industrial grades will see accelerating substitution with China-sourced tencha. Buyers who have not yet established Chinese supply relationships face a narrowing window.
3. Compliance is non-negotiable. Japan’s Positive List system tests for over 800 pesticide residues at a uniform 0.01ppm maximum residue limit — among the strictest food safety standards globally. Only producers with demonstrated compliance (typically verified through SGS or Bureau Veritas pre-shipment testing) should be considered.
4. Supply diversification is now the industry consensus, endorsed at the government policy level. Single-source procurement strategies carry elevated risk.
Key Industry Event: JFEX Tea World (June 24-26, 2026, Tokyo)
The JFEX Tea World exhibition in Tokyo will be the year’s most significant venue for tea industry networking and sourcing. Tencha supply diversification and China-origin compliance are expected to be dominant themes. For exporters seeking to enter the Japan market, this event provides direct access to Japanese buyers who are actively evaluating alternative suppliers.
Positioning for the Japan Tea Market
For tea exporters considering Japan market entry, three factors will determine success:
- Positive List compliance: Pre-shipment third-party testing against Japan’s 800+ pesticide residue standards is a prerequisite, not a differentiator.
- Labeling and packaging: Japan’s Food Sanitation Act mandates Japanese-language labeling including origin, ingredients, allergens, and licensed importer details.
- Timing: The current supply-demand gap creates a window of approximately 12 months during which Japanese buyers are actively seeking new suppliers. As relationships consolidate, the barrier to entry rises substantially.
Frequently Asked Questions
Why is matcha so expensive in 2025-2026?
Japanese tencha prices surged 116-265% due to a 77% decline in tea farms since 2000, an aging farmer population (over 70% above age 65), and rapidly growing global demand. The annual supply-demand gap is estimated at 7,000-8,000 tonnes.
Is Chinese matcha safe for the Japanese market?
Select Chinese producers have passed Japan’s Positive List pesticide screening (0.01ppm MRL) and completed commercial exports through Japanese ports. However, compliance is producer-specific — buyer due diligence and third-party verification remain essential.
What is the global matcha supply-demand gap?
Global demand is approximately 12,000 tonnes per year. Combined Japan-China production is roughly 10,000 tonnes, but much of this is consumed domestically. The effective export-available gap is estimated at 7,000-8,000 tonnes annually.
Can China replace Japan as the primary matcha source?
For premium ceremonial grades, Japanese terroir, cultivar selection, and centuries of processing expertise remain unmatched. For industrial and food-service grades — which represent the majority of volume — China’s 5,000-tonne annual production and significant cost advantage position it as the primary alternative supply source.
Terra Vista Co., Ltd. (テラ・ビスタ株式会社), registered in Japan, specializes in cross-border agricultural commodity trade including tea, connecting production regions across China, Mongolia, Nepal, and Russia with Japanese market buyers. Learn more about our tea trade services | Contact us
Data sources: Kyoto Shimbun, Japan Tea Central Association, Toyo Keizai, Japan Ministry of Finance trade statistics, Firsd Tea global matcha market report, Tongren Municipal Government press releases.