Matcha prices soar as tariffs and heatwaves hit supply chain

In July 2025, the global demand for matcha surged sharply, particularly driven by social media influence and an increase in tourism following the pandemic in Japan. Farmers struggled to meet the increasing needs as the demand had grown drastically, with sales in the UK climbing by 202 percent compared to the previous year. This increase came at a time when Japan was grappling with its hottest summer on record, which adversely affected the production and harvesting of tencha, the leaves used for matcha. Consequently, there were weak yields from the April-May harvest, exacerbating the supply problem. The severe heatwaves in 2024 severely impacted the Kyoto region, a vital area for matcha production, which accounted for a quarter of Japan's output. Farmers reported plummeted yields; for example, Masahiro Yoshida, a sixth-generation farmer, had a notable drop in his harvest from two tons to just 1.5 tons. The extreme temperatures not only damaged tea bushes but made it nearly impossible for farmers to maintain their regular production levels, forcing some businesses to overextend themselves to keep up with the consumer demand. Despite remarkable increases in production over the past decade, totaling 5,336 tons in 2024, current expectations indicate a decline in output for the year. Additionally, the implementation of a 15 percent import tax on Japanese goods, as announced in a recent trade deal between the United States and Japan, is poised to further escalate matcha prices. This tariff aims to balance trade interests but substantially affects imports of a product that lacks a U.S. domestic industry. Rising prices and a dwindling supply chain have left many matcha distributors scrambling. As reported by tea importer Lauren Purvis, orders for matcha surged by more than 70 percent in early July, leading to an increased urgency among cafes and retailers to secure supplies ahead of the tariff implementation. Some establishments were forced to request daily shipments to keep pace with the barely-sustainable demand for the beverage. Overall, the combination of environmental factors and trade policies leads to a concerning future for matcha accessibility in markets globally.