Matcha Shortages and the New Tea Café Wave — 2026-10-18
Kagoshima Prefecture officially signed agreements to build its largest matcha processing facility, aiming for 300 tons of annual production to counter global shortages. Meanwhile, new data reveals that while tencha output increased, auction prices in Kyoto and Kagoshima continued to surge, with average prices hitting record highs.
Matcha Shortages and the New Tea Café Wave — 2026-10-18
Top developments
Kagoshima launches largest matcha processing facility
On October 16, 2026, Kagoshima City and JA Kagoshima Tea Industry signed a location agreement to establish the prefecture's largest matcha processing facility within the Kagoshima Tea Distribution Center. The new plant aims to produce 300 tons of Kagoshima-grown matcha annually, a strategic move to stabilize supply and enhance the brand value of "Kagoshima Tea" amidst global demand surges. This development highlights Kagoshima's ambition to maintain its status as Japan's top tea-producing region while addressing the "matcha shortage" narrative through expanded local processing capacity.
Tencha auction prices break records despite higher output
Recent data from the Kyoto tea market shows that tencha (the raw leaf for matcha) prices continued to climb in 2026, reaching an average of ¥17,797/kg, up from ¥5,402/kg in 2024. This surge occurred even though Japan's 2026 first-flush harvest was 21% larger, indicating that demand is outpacing supply growth. Similarly, Kagoshima's recent auction saw average prices rise to approximately ¥19,000/kg, running 30-60% above pre-2025 levels. These figures confirm that the "shortage" is now a structural price crisis rather than a simple volume deficit.
New specialty matcha café opens in Maryland
Reflecting the "new tea café wave," Tyafé, a specialty café focusing on matcha, lattes, and croffles, opened its doors at Westfield Wheaton Mall in Maryland on October 17, 2026. The opening coincides with a broader trend where matcha is moving from niche Japanese shops into mainstream American mall food courts. This expansion demonstrates the resilience of matcha demand in the US retail sector, even as wholesale costs in Japan rise.
Local view
Local media in Kagoshima are framing the new facility not just as an economic boost, but as a necessary step to secure the region's reputation as "Japan's Number One Tea Producer." The Minami-Nippon Shimbun reports that local stakeholders are focusing on improving recognition and adding value to Kagoshima tea through better processing infrastructure. This local perspective contrasts with the national narrative of a "shortage," suggesting that major producers are actively expanding capacity to meet the "matcha boom" rather than just complaining about low supply.
Context & numbers
- Kyoto Tencha Prices: Average price reached ¥17,797/kg in 2026, up from ¥5,402/kg in 2024.
- Kagoshima Tencha Prices: Auction prices hit ~¥19,000/kg, a 30-60% increase over pre-2025 levels.
- Production Goals: The new Kagoshima facility targets 300 tons of annual matcha production.
- Market Volume: Kyoto's 2026 first harvest market handled ~950 tonnes of tea, with average prices rising from ¥10,251/kg to ¥13,614/kg across all tea types.
On the radar
- Ippodo Product Changes: While the specific notice regarding bancha limitations dates to March 2026, the ongoing "State of Japanese Tea" updates from Ippodo Tea (published recently) continue to highlight their adaptation strategies, including maintaining quality amidst supply constraints.
- US Café Sourcing: US cafés are increasingly asking for stable price lists, with suppliers like RIKYU reporting a shift in buyer behavior towards securing long-term supply contracts over just price competition.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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