Matcha latte prices set to soar as global craze and record-breaking heatwave fuel supply chain crisis
Farmers and industry officials have spoken out as they struggle to meet the ever-increasing demand for the bright green tea drink from Japan, which has peaked in popularity this year.
Matcha's popularity has been growing over recent years, with sales soaring by 202 percent in the UK in 2023 alone according to Orion Market Research. The antioxidant rich beverage has reached its apex this year, driven by social media and Japan's post-pandemic tourism boom.
The Kyoto region, which accounts for a quarter of Japan's production of tencha - the stemmed leaves dried and ground into matcha - was hit by severe heatwaves last summer during Japan's hottest year on record, which led to weak yields in the recent April-May harvest.
US-based tea importer Lauren Purvis told the BBC her customers were seeing what was once a month's supply run out in days: "Some cafes are even asking for a kilo a day. They're desperate to keep up," the Mizuba Tea Co. owner said.
Masahiro Yoshida, a sixth-generation farmer, was only able to harvest 1.5 tons of tencha this year, down a quarter from his typical harvest of two tons.
'Last year's summer was so hot that it damaged the bushes, so we couldn't pluck as many tea leaves,' he told Reuters from his storefront in Uji, south of Kyoto.
Traditionally, the tencha leaves are kept under shade for weeks while growing in order to develop the tea's 'umami' taste. The leaves are then harvested, dried and ground into powder using stone mills.
Tealife founder Yuki Ishii told Reuters that it saw a ten-fold increase in demand for matcha from customers, despite the amount available from Japan declining.
'I'm basically always out of stock," he said.
Japan produced 5,336 tons of tencha in 2024, nearly three times more than a decade before as more farmer's switch to the crop, according the Japanese Tea production Association. Despite this, the association expects lower matcha output this year.
As well as surging demand and lesser tea crops this year, US tariffs on Japan have pushed up matcha prices.
On Tuesday, Washington and Tokyo announced a trade deal which means there will be a 15 per cent import tax on Japanese products going into the US.
The move has led matcha distributors to brace for the impact, with Ms Purvis saying orders surged by more than 70 per cent in early July ahead of a deadline for the two countries to reach a trade agreement.
'As Japanese tea is not grown in the US, there is no American industry under threat that tariffs need to protect,' she told the BBC. 'We hope there will be a realisation that specialty tea should be exempt.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
an hour ago
- Reuters
Biogen signals Leqembi sales gaining momentum, lifts profit forecast
July 31 (Reuters) - Biogen (BIIB.O), opens new tab raised its annual profit forecast and beat estimates for quarterly results on Thursday, as strong demand for its rare disease drugs largely countered declining sales of its older multiple sclerosis treatments. Its shares rose as much as 5.6%, with the drugmaker also topping sales estimates for its keenly-watched Alzheimer's treatment Leqembi, which has struggled with slower uptake. Global sales of Leqembi, developed with Japan's Eisai (4523.T), opens new tab, rose fourfold from a year earlier to about $160 million, surpassing analysts' estimates. A large part of the jump was driven by U.S. sales at $63 million, which also exceeded estimates of $60.5 million, according to Jefferies. "This is the first time we've seen this market grow approximately by 15% based on total new patient starts," Biogen's North America head Alisha Alaimo said on a post-earnings call with analysts. Leqembi, which sells for $26,500 annually in the U.S., had a slow start due to concerns over cost, efficacy and side effects. But Biogen said improved rates of blood tests to diagnose the memory-robbing condition have helped with the uptake. The U.S. Food and Drug Administration cleared the first blood test to diagnose Alzheimer's disease in May. Meanwhile, Biogen said it does not expect President Donald Trump's tariffs to have a material impact on its profits this year as a significant portion of its U.S. revenue comes through domestic manufacturing. It announced a $2 billion investment in its key North Carolina manufacturing facility last week. Pharmaceuticals have long been shielded from tariffs, but the Trump administration has started to include them in trade deals to spur domestic drug manufacturing. Biogen, under CEO Chris Viehbacher, has turned to deals, cost-cutting and newer drugs to address investor pressure for growth. Its rare disease portfolio – which includes genetic disorder drug Skyclarys, spinal muscular atrophy drug Spinraza and ALS drug Qalsody – brought in sales of $543 million in the second quarter, up 2% from a year earlier. Spinraza sales, however, registered an 8.5% fall, hurt by inventory drawdown outside the U.S., which Biogen expects to continue into the third quarter. On an adjusted basis, the company expects 2025 profit of between $15.50 per share and $16.00 per share, compared with its previous forecast of $14.50 to $15.50. It earned $5.47 per share in the reported quarter, beating analysts' expectations of $3.86.
Reuters
3 hours ago
- Reuters
Zimbabwe on track for 6% growth as economy recovers from drought
By Chris Takudzwa Muronzi HARARE, July 31 (Reuters) - Zimbabwe is on track to achieve a forecasted 6% economic growth in 2025 helped by good agricultural output and strong commodity prices, Finance Minister Mthuli Ncube said on Thursday. The Southern African country's economy has shown signs of recovery in the first half of the year following a severe drought and currency turbulence in 2024 that pushed GDP growth down to 2%. "Given the positive economic developments during the period January to June, we are confident that the projected economic growth of 6% alluded to in the 2025 National Budget is achievable," Ncube told parliament in a mid-year budget review. "All sectors of the economy are expected to record positive growth in 2025, mainly on account of a favourable agriculture season, improved electricity generation, stable exchange rate and inflation rate," he said. He did not give an update on the budget deficit, which was seen at 0.4% of gross domestic product in 2025 during the budget forecast last November. Zimbabwe's fiscal position remains under strain from grain imports, drought relief spending and the public sector wage bill. While the government has collected more revenue than in the same period last year, analysts say containing the deficit may prove difficult without new fiscal measures. The local currency, the ZiG, launched in April 2024 to replace the Zimbabwe dollar, has largely remained stable against the U.S. dollar but is still overshadowed by widespread use of the dollar in everyday transactions. Ncube reiterated the government's commitment to the gold-backed unit and said the currency had benefited from tight monetary and fiscal policies.
Reuters
4 hours ago
- Reuters
India vows to protect farmers as Trump's 25% tariff threat sparks opposition fury
NEW DELHI, July 31 (Reuters) - India vowed on Thursday to protect its labour-intensive agriculture sector, a central sticking point in bogged-down trade talks with the U.S., as Washington threatened 25% tariffs, triggering outrage from the opposition and a slump in the rupee. Without a deal, the rate will go into effect from Friday and single out India for harsher trade conditions than its major peers, potentially damaging the economy of a strategic U.S. partner in Asia seen as a counterbalance to Chinese influence. Though negotiations are continuing, they have hit a wall due to the United States' insistence that India open its agricultural markets. New Delhi has long shielded the sector, which - with over 40% of the workforce engaged in farming activities - constitutes the most influential voting bloc in the world's most populous nation. "The government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and (medium and small businesses)," India's trade minister Piyush Goyal said in a statement in the parliament. U.S. Treasury Secretary Scott Bessent said in a CNBC interview on Thursday that the U.S. trade team was frustrated with India, adding that the future of trade deal between the two nations was now up to India. U.S. President Donald Trump had said on Wednesday that, in addition to the 25% tariff on imports from India, the country would face an unspecified penalty for its dealings with Russia and its membership in the BRICS grouping of nations. "I don't care what India does with Russia," Trump wrote in a Truth Social post on Thursday. "They can take their dead economies down together, for all I care." India's benchmark equity indices, the Nifty 50 (.NSEI), opens new tab and BSE Sensex (.BSESN), opens new tab, fell as much as 0.9% in early trade before paring losses and both closing around 0.4% lower. The rupee closed 0.2% down at 87.5950 to the dollar after touching its lowest level in more than five months earlier in the day. The government's failure to clinch an agreement with Trump, even as other major world economies like the European Union, Japan and South Korea have struck deals in recent days, sparked anger among India's political opposition. "The government has destroyed our economic policy, has destroyed our defence policy, has destroyed our foreign policy," opposition leader Rahul Gandhi told reporters on Thursday. Economists warned the steep tariff could hurt India's manufacturing ambitions and trim up to 40 basis points off economic growth in the financial year to March 2026. Some doubted whether further negotiations would lead to improved conditions. "While further trade talks may bring the tariff rate down, it appears unlikely that India will secure a significantly better outcome than its eastern neighbours," said Priyanka Kishore, an economist at Asia Decoded. Other countries have negotiated better U.S. tariff rates, with Vietnam agreeing to 20%, Indonesia to 19% and Japan and the EU both facing levies of 15%. On Wednesday, Trump said Washington had reached a trade deal with India's arch-rival Pakistan that Islamabad said would lead to lower tariffs on its exports, though neither side has yet revealed the agreed rate. Since India's short but deadly conflict with Pakistan in May, New Delhi has been unhappy about Trump's closeness with Islamabad and has protested, casting a shadow over trade talks. Despite previous public displays of bonhomie between Trump and Prime Minister Narendra Modi, India has hardened its stance towards the United States in recent weeks. Trump has repeatedly taken credit for the India-Pakistan ceasefire he announced on social media on May 10, but India disputes his claim that it resulted from his intervention and trade threats. The U.S., the world's largest economy, currently has a trade deficit of $45.7 billion with fifth-largest economy India.
