I recently returned from Japan, where I visited tea farmers, production facilities, partners (both old and new), and cafes across the Yame, Uji, Shizuoka, and Tokyo regions. This experience deepened my understanding and appreciation of Japan's tea ecosystem and the remarkable people who bring it to life. Below is a summary of insights from my recent experiences and updates we anticipate in the coming weeks.
MATCHA SHORTAGE 2025
Matcha's unprecedented global popularity has created shortages and disruptions throughout the supply chain. Typically, producers enter each new season with stable reserves that have been aged and prepared for blending with the fresh harvest. However, matcha producers exhausted much of their 2024 reserves during the winter and early 2025, leaving less available matcha as we enter the new harvest season.
Additionally, the new harvest yield is smaller than last year. Beginning in Japan's southern regions (Yame) in early May and continuing through Uji and Shizuoka, this year's first flush is expected to deliver high quality but with yields 10-15% lower than the previous season.
These combined factors mean significantly less tea will reach the market.
MATCHA PRICING UPDATE
Factors. A number of variables contribute to the price of matcha. In Japan there is the cost to grow and harvest the tea (including materials and labor), next is production costs (steaming, blending, milling, and more), and then the selling of matcha (which can take multiple paths, but a general indicator is the price at tea auctions). There are additional costs between when your tea leaves Japan and arrives to you. These include variables like exchange rates, shipping costs, tariffs, and mark-ups at retail.
In Japan, costs are increasing. Labor shortages and demand at production facilities have driven incrementally higher costs over the past few years. These can be planned for and controlled to an extent. However, the next factor is making this season unlike any other. During my Japan travels, two sources confirmed that the first weeks of the tea auction saw an unprecedented 180 - 200% increase in the price of matcha. This shocked experienced buyers who rely on this tea to produce their blends, and will ultimately lead to higher prices for end consumers.
In the United States, we have a few factors affecting the price of matcha. Luckily, we still benefit from favorable exchange rates despite slipping since January. But the first factor negatively impacting our costs is the new baseline 10% tariff on all Japanese goods imported into our country. Japanese tea was never taxed or tariffed by the United States since I started importing tea. Last month, I paid our first tariff invoice, which is basically just a 10% increase in our costs. Additionally, shipping rates seem to increase every year, and are currently at an all-time high.
As a matcha consumer, you should also be aware of new (and unscrupulous, in my opinion) business practices that have surfaced in the current environment. As you may have seen, faceless businesses are purchasing matcha at retail and selling for exorbitant prices. They have no relationship with matcha producers and seem to have little interest in contributing to the matcha community. They are opportunists driven by making money from the circumstances.
Expectations. Expect matcha prices to increase this summer. Our partners (producers and farmers) have told us to expect this increase to occur as soon as mid-June. Details of how much the price of matcha will increase have not been disclosed, but signals tell me it could be significant.
Jason Rice
SUGOi Sweets + MOKOMA Tea
Co-Founder
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