KYOTO - The global matcha boom is driving up costs in Japan’s historic tea capital, with Uji City in Kyoto Prefecture set to raise usage fees at its municipal tea rooms by roughly 50% as soaring demand pushes up the price of tencha, the raw material used to produce matcha.
Uji’s bittersweet yet refreshing matcha has long been a symbol of Kyoto’s tea culture, and at Taihoan, a city-run tea house near the UNESCO-listed Byodoin Temple, tea ceremony experiences showcasing Uji tea have become a major attraction. Visitors are guided through traditional etiquette such as preparing and receiving tea, with the venue drawing more than 20,000 users in the past fiscal year, about 80% of them from overseas.
With global interest in matcha surging, the city plans to raise tea room fees from April. A bowl of “usucha” served during tea sessions will increase from 1,000 yen to 1,500 yen, while a full tea ceremony experience will rise from 2,400 yen to 3,600 yen.
Sugimoto Takayuki, head of the industrial tourism division in Uji City, said Uji tea has gained global attention in recent years, pushing market prices two to three times higher. The city aims to maintain service quality and enhance hospitality while adjusting prices to reflect rising costs.
The primary factor behind the increase is the sharp rise in tencha prices. According to agricultural cooperatives, auction prices for tencha have quadrupled over the past five years.
The effects are also being felt across the city. A specialty Uji tea shop that opened in June last year was launched by Tobias Baer, a Swiss national who trained in tea in Japan. While wholesale prices for matcha have climbed, Baer said he cannot pass on the full cost to customers, as he wants more people to enjoy high-quality tea.
During reporting, a coffee shop owner from the Caribbean visited the shop seeking to incorporate matcha into a new menu. The visitor said matcha is rapidly gaining popularity worldwide and, although expensive, high-quality products command higher prices.
Even as global demand grows, the boom has brought challenges. Uji’s decision to raise municipal tea room fees reflects broader cost pressures, with tencha prices up roughly fourfold in five years.
Exports of green tea, including matcha, have also surged. From 2024 to 2025, export values nearly doubled year on year to 72.1 billion yen, with matcha accounting for 84% of the total.
At the same time, traditional tea producers are facing difficulties. Cases of bankruptcy, closure, or dissolution among tea businesses have increased, reaching 11 in the first half of 2025, already exceeding the 10 recorded in 2024 and putting the year on track for a record high. Many smaller operators lack overseas sales channels, and domestic consumption has declined as younger generations move away from Japanese tea. Demand linked to funeral services has also decreased as ceremonies shift to smaller family-based formats.
Producers are attempting to switch from sencha to matcha production, but supply has struggled to keep up with global demand. As more farmers convert fields to matcha cultivation, output of other green teas has declined, driving up prices across the sector.
Retail prices are already rising. Procurement costs for bancha have increased fivefold and for green tea threefold. A 600ml bottle of Ito En’s Oi Ocha green tea is set to rise by 21 yen from March shipments.
The shift reflects differences in cultivation. While sencha is grown in sunlight, matcha uses the same leaves but is cultivated under shade. With more farmers converting to matcha production, supplies of other teas are shrinking, leading to broader price increases.
In response, Ito En is working to expand tea fields nationwide and support producers to secure raw materials. Analysts say Japan’s tea industry, once reliant on domestic consumption, now faces the challenge of adapting to rapid population decline and surging global demand.
Source: YOMIURI
