Matcha Boom is Sencha’s Doom? The cost of the Matcha Craze
Global Matcha Boom: Blessing or Curse?
If you walk into any Matcha cafe today, you will see the “compulsory Matcha phrases”, such as lattes, ceremonial-grade, or all the Japanese words. Even in Singapore, showing the word “ceremonial grade” has been a staple. We see a lot of people crowding at Hvala every weekend, or maybe Tsujiri at Clarke Quay to enjoy the scenery as they sip a cup of latte topped with ice cream.
It seems that the Matcha Boom has been good for the tea industry… or has it been?
Unfortunately, for Japan’s sencha producers, the boom has quietly turned into a crisis. But first of all, what is the relation between the two teas?
Actually, both sencha and matcha (tencha) start from the Camellia sinensis plant. The difference is that farmers shade the bushes for three to four weeks and the leaves accumulate the amino acids and bright chlorophyll that make tencha, the raw material for matcha, while they leave them in the sun to get sencha. Because of the overwhelming overseas demand, matcha prices rose and export demand surged. This results in a change of how farmers work: more land, more labor, and more leaves were redirected toward tencha. In other words, less sencha.
And due to this matcha boom, Japan’s smaller tea manufacturers have been feeling the pressure most acutely. Domestic tea producers have been getting inquiries about procurement of teas on Instagram from overseas, and they don’t just want in grams, they want kilograms.
Squeezed from Above and Below
While small-scale producers like Mr. Okada of Jokoen emphasized that their tea is a labor of love, stating, “We put our heart and soul into cultivating these teas, and we do not want to just use them to make money”, the economic reality is different. In early 2025, the Japanese Ministry of Agriculture and the Kyoto Prefectural Government began rolling out subsidies specifically for Tencha conversion.
China Enters the Story
What if I tell you; China is already the world’s largest matcha producer and consumer?
As of 2025, the country accounts for roughly 60% of global matcha output, with production estimated at 5,000 metric tonnes, approaching or surpassing Japan’s total. The main producing regions, Guizhou, Zhejiang, and Hubei, have invested heavily in shaded cultivation and industrial milling. Jiangkou County in Guizhou alone sold over 1,200 tonnes of matcha in 2024. On January 2026, it is revelaed that Guizhou matcha has achieved its first ever large scale export to Japan.
The sencha parallel: China too
But is there a possibility that China will face the same issue with the tea artisans in Japan?
It’s not an impossibility.
When matcha prices spiked, farmers in China might have to shade their sencha bushes mid-season to convert the harvest into tencha, essentially sacrificing sencha yield to chase matcha margins. The matcha boom will affect both countries’ sencha supply simultaneously.
What to do as a buyer?
For buyers sourcing from either origin, this is not a temporary bottleneck. It reflects a structural shift in how farmers are allocating land and labor. Until growing area expands meaningfully, sencha supply will remain constrained relative to pre-boom levels.
What does that mean?
For now, the Chinese matcha is positioned as the volume and food-grade tier. Japanese matcha retains dominance at the premium and ceremonial end with a significant number on its price tag. Here is where buyers can tap on for their business; diversifying their supplies according to what they need. Relying on just one supplier will result in an availability risk. The only risk for buyers is assuming the two tiers are just the same, or conversely, paying lofty Japanese prices for applications where food-grade Chinese matcha performs identically.
What smart buyers are doing now
Smart buyers don’t just chase for supplies, they are building a deliberate two-origin strategy. They source Japanese matcha for positioned, premium-facing products and Chinese matcha for volume applications. They might also tap on similar teas such as kabusecha, gyokuro, and bancha, and proactively qualifying backup suppliers in both markets.
In an increasingly unpredictable world, flexibility is what gets you moving.
Expanding overseas requires more than just a supplier; it requires a strategy. Whether your product demands the ceremonial heritage of Uji or the industrial scale of Guizhou, we help you make the right call for your margins.
