Matcha prices surge as US imposes tariffs on Japanese imports

Japan has faced significant challenges in supplying matcha due to unprecedented global demand and record-setting temperatures. In 2023, matcha's popularity soared, evidenced by a remarkable 202 percent sales increase in the UK alone, driven largely by social media promotion and a resurgence in post-pandemic tourism to Japan. However, the Kyoto region, responsible for 25 percent of the country's tencha production, struggled with severe heatwaves that diminished yields during the critical harvest period of April-May. This resulted in farmers reporting much lower yields than typical. For instance, Masahiro Yoshida, a sixth-generation farmer, managed to harvest only 1.5 tons this year, down from his usual two tons, attributing the drop to last year's damaged tea bushes. Meanwhile, the U.S. has complicated matters further by imposing a 15 percent tariff on matcha imports, leading to an increase in prices. The announcement has put distributors on high alert, with many, including Lauren Purvis of Mizuba Tea Co., reporting supply shortages as orders surged ahead of the tariff's rollout. Some establishments now require a kilo of matcha daily as they try to meet customer demand, creating a frantic atmosphere in the tea trade. As demand continues to exceed supply significantly, experts predict that the increasing prices combined with trade policies may force consumers to reconsider their matcha consumption. Despite efforts to expand crop production over the past decade, lower outputs this year challenge the matcha market. The Japanese Tea Production Association has expressed concerns over lower expected outputs amid continuing consumer interest, especially as tea remains largely unavailable to American consumers from local sources. The situation has prompted discussions surrounding the future of specialty tea tariffs, questioning the need for such import taxes when no American industry produces matcha. This long-standing trend highlights broader issues of agricultural sustainability and international trade that could reshape consumer prices and access to this popular beverage.