Why Matcha Prices Are Unlikely to Fall: Three Structural Reasons Behind Persistent High Prices

Introduction
Matcha has become a global phenomenon, driven by social media, wellness trends, and the worldwide expansion of café culture. Despite this rapid growth in popularity, matcha prices have not declined. On the contrary, prices remain high and, in many cases, continue to rise.

This is not a temporary imbalance. It is the result of structural factors on both the demand and supply sides. This article explains why a meaningful decline in matcha prices is unlikely, focusing on three key reasons.

1. Global Demand Far Exceeds Supply
   The most significant factor is the explosive growth in global demand. Matcha is no longer limited to traditional tea consumption. It is now widely used in lattes, desserts, ready-to-drink beverages, protein products, supplements, and even cosmetics.
   Market research forecasts that the global matcha market will continue to grow at an annual rate exceeding 7 percent, reaching nearly USD 8 billion by the early 2030s.

At the same time, Japanese government materials acknowledge that overseas demand for matcha is expanding faster than Japan’s domestic production capacity. In addition, climate-related challenges—such as extreme heat—have begun to negatively affect yields, further tightening supply.

The result is a clear structural gap: global demand is scaling rapidly, while supply remains constrained by Japan’s agricultural and processing capacity.

Key takeaway: Demand growth is global and accelerating, while supply expansion is slow and limited, making price declines unlikely.

2. Declining Tea Farmers and Cultivated Land in Japan
   Matcha is produced exclusively from tencha leaves grown in Japan. However, the number of tea farmers and the total area of tea cultivation have been declining for years due to aging farmers, labor shortages, and structural challenges in Japanese agriculture.

In some tea-producing regions, the number of active tea farmers has fallen dramatically over the past decades. This contraction means that even if demand rises, the supply side lacks the manpower and land base to respond quickly.

Moreover, matcha production is not simply about growing tea leaves. It requires specialized shaded cultivation, tencha processing facilities, and milling capacity, all of which represent additional bottlenecks.

Key takeaway: Fewer farmers and shrinking farmland structurally limit supply, reinforcing high prices.

3. A Five-Year Lead Time Before New Tea Fields Produce
   A common misconception is that higher prices will quickly lead to increased production. In reality, matcha does not work that way.
   Tea plants grown for matcha require approximately five years from planting before they reach a stable, harvestable stage suitable for tencha production. Even after initial harvesting becomes possible, additional time is needed to achieve consistent quality and yield.

This long biological and operational lead time means that today’s high prices cannot translate into near-term supply increases. Matcha production simply cannot scale on short notice.

Key takeaway: Matcha has a long production cycle, making rapid supply adjustment impossible.

Conclusion
Matcha prices are supported not by hype, but by structure. Three forces operate simultaneously:

1. Global demand continues to grow faster than supply

2. Japan’s tea farming base is shrinking

3. New production requires years, not months, to materialize

Given these realities, expecting a significant drop in matcha prices is unrealistic. Instead, buyers, brands, and manufacturers should focus on strategic sourcing—such as long-term contracts, grade-specific product design, and inventory planning—to manage cost and supply risk in a structurally tight market.

References
Global Matcha Tea Market Forecast
https://www.htfmarketintelligence.com/report/global-matcha-tea-market

Japanese Government Report on Tea Exports and Matcha Demand
https://www.sangiin.go.jp/japanese/annai/chousa/rippou_chousa/backnumber/2025pdf/20251202087.pdf

Reuters: Japan’s Matcha Output Struggles to Meet Global Demand
https://www.reuters.com/business/japans-heat-stressed-matcha-tea-output-struggles-meet-soaring-global-demand-2025-07-04/

Arab News: Matcha Production and Five-Year Cultivation Cycle
https://www.arabnews.jp/en/business/article_150794/

NRI / Agricultural Report on Tencha and Matcha Processing
https://www.nochuri.co.jp/report/pdf/nri2601re3.pdf

Courrier Japon: Decline of Tea Farmers in Japan
https://courrier.jp/news/archives/421037/