A global matcha boom has triggered a dramatic price surge for Japanese sencha green tea. The price for new tea leaves reached a record 180,000 yen per kilogram at the first joint auction in Koka, Shiga Prefecture on May 1. This figure stands nine times higher than last year’s price. Consequently, this price surge reflects rising demand for tencha, the processed leaves from which matcha derives.
Koka is the prefecture’s largest tea-producing area. About 90 percent of land used by Green Tea Tsuchiyama, an agricultural producers’ cooperative, now cultivates tencha. Tencha also accounted for roughly 98 percent of the cooperative’s 600 million yen in sales last fiscal year. Therefore, the price surge benefits tea farmers directly. Higher material costs for fuel had negatively affected their operations. Haruki Fujimura, a cooperative representative, said selling prices have finally caught up to general cost increases.
Retailers face a difficult predicament because of this price surge. They cannot immediately pass higher costs to their customers. Kenji Yoshinaga, president of tea retailer Maruyoshi Oumicha Co., noted that about 70 percent of tea now hitting the market is matcha. The remaining 30 percent is for brewing in teapots. Purchase prices have doubled this year, yet retail prices cannot rise by the same amount. Consequently, Maruyoshi caps its price increases at roughly 10 to 30 percent.
Despite these retail challenges, the price surge indicates a reevaluation of Japanese tea’s value. Yoshinaga called it a fair assessment of its worth. To survive, Maruyoshi has developed overseas sales channels. Foreign customers accounted for less than 1 percent of sales five years ago. However that figure jumped to 20 percent during the previous business year.
Meanwhile, Koka Mayor Hiroki Iwanaga believes this price surge presents an undeniable opportunity. The city launched a five-year research project to establish Asamiya tea as a national brand. Asamiya tea is one of the five great Japanese teas. Tea leaves from Asamiya and Tsuchiyama have sometimes sold as Uji tea elsewhere. The mayor wants to raise awareness of what tea actually grows in Koka. Thus, the price surge may help local producers build their own identity.
