Behind the “Japanese Matcha Made in China”: Has Japan’s Global Sales of Tea Led to a Domestic Supply Shortage?

Matcha is booming globally. But behind this success lies a growing concern: Japan, the face of matcha culture, is running out of its own matcha.

Yes, Japan’s growing matcha exports have outpaced its local production capacity, causing a domestic shortage and increased reliance on imports—including from China.

I’ve been closely watching the matcha industry shift over the past few years. Let me walk you through what’s really happening behind the scenes—and what it means for global buyers like us.

Is There Really a Matcha Shortage in Japan?

Japanese brands are quietly limiting sales. Some are even halting supply to locals.

Yes, many iconic Japanese matcha companies have started restricting domestic supply due to a growing gap between production and exports.

This change didn’t happen overnight. Since 2024, multiple long-established matcha producers in Japan began limiting purchases and even pausing retail supply entirely. For locals, this came as a surprise. For industry insiders, it was expected. Global matcha demand exploded thanks to lifestyle trends and social media, and Japan’s production simply couldn’t keep up.

In Japan, tencha—the raw material used to make matcha—is harvested with great care. But the total volume remains limited due to land constraints and climate-related risks. Meanwhile, the surge in overseas orders from markets like the U.S. and EU has put domestic availability at risk. Brands now prioritize exports because of better pricing and higher profit margins.

Let’s put this into perspective:

Matcha Supply and Demand Trends in Japan

What Caused the Domestic Shortage in Japan?

Unusual weather, aging tea farms, and global demand have collided.

A mix of lower harvests due to heatwaves and surging exports led to a supply crunch for Japan’s domestic matcha market.

In Kyoto’s Uji region—Japan’s historical matcha heartland—farmers are reporting record-low tencha yields. Masahiro Yoshida, a sixth-generation farmer, harvested just 1.5 tons in 2024, down from his usual 2 tons. Prolonged heat waves damaged leaves and slowed regrowth. At the same time, demand outside Japan kept climbing.

And there’s another issue: Japan’s tea farms are aging. Around 40% of current tea trees are over 30 years old. These old bushes yield lower quality and quantity, requiring costly replanting.

Meanwhile, the internal market still relies on matcha for ceremonial and commercial use. But those domestic demands are now being sidelined as Japanese producers shift focus to international profits. This is a difficult balancing act—one where export revenues are winning.

Japan’s Domestic Tea Farming Challenges

How Much Japanese Green Tea Is Actually “Made in China”?

More than most consumers realize—China supplies the majority of Japan’s raw green tea imports.

Over 90% of Japan’s imported green tea over the past 20 years has come from China, supporting both beverage and matcha industries.

This isn’t new. Since the early 2000s, Japan has relied heavily on imported green tea to meet its processing needs—especially when green tea beverages gained popularity. While annual imports peaked at 15,000 tons in the early 2000s, recent years still see about 3,000 tons entering Japan.

Official trade records don’t always separate matcha from other powdered teas, but industry experts agree that imported Chinese green tea supports multiple matcha-like products marketed under Japanese brands. Some tea processors in Japan import raw or partially processed tea and complete the final steps locally—then label it “Made in Japan.”

This practice has stirred online debate. Cultural purists question the authenticity, while global buyers are left wondering how much of their “Japanese matcha” is actually grown in Japan.

Japanese Green Tea Imports from China

Why Is Japan Still Exporting So Much Matcha Despite Local Shortages?

It’s all about economics—exports bring higher returns.

Japan prioritizes matcha exports because international sales offer significantly higher profits compared to the domestic market.

In 2024, 58% of Japan’s exported green tea (by volume) was powdered tea like matcha—but it accounted for 75% of total green tea export revenue. That’s over 271 billion yen (around USD 182 million). Clearly, powdered tea delivers better margins.

By exporting matcha as a luxury and wellness product, Japanese producers tap into premium price brackets in markets like the U.S., Germany, and Australia. These markets are less price-sensitive and more brand-conscious, willing to pay a markup for the “Japanese” origin.

For many tea producers facing stagnant local consumption, international exports are their growth engine. The result? Domestic customers lose access while international shelves stay stocked.

Export vs. Domestic Price Comparison (Estimated)

Where Is Most of Japan’s Matcha Going?

America and Europe are leading the global matcha demand.

In 2024, the U.S. imported 2,217 tons of green tea powder from Japan, while the EU and UK together imported 909 tons—making up 61% of Japan’s total exports.

The biggest buyers of Japanese matcha are trend-driven food and beverage brands, café chains, health product manufacturers, and e-commerce sellers. Many of them offer private-label products that rely on Japanese matcha’s reputation.

Matcha is now common in everything from energy drinks to protein bars. Even major grocery chains in North America and Europe carry matcha products—from ceremonial tins to flavored lattes and face masks.

This explosion of applications continues to pull supply away from Japan’s local market. Japanese tourists sometimes complain they can’t even buy matcha at Kyoto stations—because stock is prioritized for overseas orders.

Top Destinations for Japanese Matcha Exports (2024)