Here's the tea: Global shortage means steep prices for matcha lovers

Matcha beverage with packaged matcha products on a shelf in the background.

An iced matcha latte at Asha Tea House. Global demand for matcha has seen prices increase for the popular powdered tea. Source: AAP, AP / Haven Daley

Global matcha prices are surging due to poor weather in Japan, rising global demand, labour shortages, and steep US tariffs on imports from Japan and China. Now, the world’s love affair with matcha may be tested - at the checkout counter.


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TRANSCRIPT

"I have matcha every morning. It's actually my go-to drink. It is kind of how I start the day."

Melissa Lindsay is a customer of Asha Tea House in San Francisco.

The owner is David Lau.

"So matcha is a stone milled green tea. It's actually a tea powder and instead of drinking an infusion of the tea leaf with hot water, you're consuming the entire leaf."

The GS Haly Company is one of the organisations that supplies matcha to shops like this.

Senior Tea Buyer Aaron Vick says matcha has traditionally been used in Japanese tea ceremonies, but now is being mass-consumed in drinks and desserts across the globe.

"Matcha has long been an important ingredient for baked goods, for confectionary, candies."

In fact, matcha has been hailed as a superfood, splashed across social media in bright green lattes, and embraced by cafes from Tokyo to Los Angeles.

Recently however, Aaron Vick says there have been issues brewing on the horizon: because this year’s harvest simply can’t keep up with the global craze.

"There is limited supply, not due to lack of innovation or ambition, but simply there's only so much tea grown in Japan."

Aaron says these supply issues, coupled with the popularity of matcha itself, has seen prices spike.

In fact, prices for matcha are surging worldwide, with Japanese matcha, known for its quality, set to jump by up to 70 percent this year.

"We've always been saying matcha is growing, but certainly within the last one or two years there has been exponential unprecedented growth in demand."

David Lau can attest to that.

"The price has skyrocketed. For us it's more than doubled; and we weren't expecting that at all. Our matcha drinks, we sell them in the hundreds every day. And we go through many hundreds of kilograms every month or two. Yeah, it's a lot of matcha."

Larry Tiscornia teaches traditional Japanese tea service lessons - and he has also seen a change.

"My wife and I teach privately weekly and we have students that come and learn how to do the tea ceremony. People are going at these tea stores and they're limited to like one small 20-gram can. But one year ago you could go in and buy hundreds of grams of tea. So it's very bizarre."

The spike in pricing is being fuelled by poor weather in Japan, as well as labour shortages in both Japan and China.

The Japanese government has been trying to help, offering support to tea growers through funding, equipment - and even counselling - to encourage a shift from regular sencha tea to matcha.

Since 2008, production of tencha, the leaf used to make matcha, has nearly tripled - and exports to the US now account for about a third of Japan’s total tea exports.

But whether that's enough remains to be seen.

Aaron Vick says says US tariffs are adding even more pressure: there's 15 percent duties now on Japanese matcha and nearly 38 percent on matcha from China.

"The cost increases that we have been discussing up to now have been purely derived from supply and demand situation and the shortage of available leaf against the sudden extreme popularity of matcha. Additional to that, we will also certainly see an increase in price due to tariffs."

All of this means that matcha lovers should prepare for a steeper sip.

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