Japan's Sencha Tea Prices Double in 2026 — What the Matcha Boom Means

Record-High Tea Auction Prices in Shiga: What U.S. Matcha Buyers Need to Know

Japan's tea market is seeing historic price movements in 2026. At the first green tea auction of the season held on May 1, 2026, in Koka City, Shiga Prefecture — one of Japan's most important tea-producing regions — sencha prices hit an all-time high, with the average price doubling compared to last year. The top lot sold for ¥180,000 per kilogram (approximately $1,146 USD), a staggering nine times higher than the previous year's peak. The season average came in at ¥14,232 per kilogram (approximately $91 USD), both figures setting new records according to the Shiga Prefectural Tea Industry Council.

What Is Sencha — and Why Does It Matter for Matcha?

Sencha (煎茶) is Japan's most widely consumed green tea, made from tea leaves grown in open sunlight and brewed by steeping in a teapot or cup. It is distinct from matcha, which is made from tencha (てん茶) — shade-grown leaves that are stone-ground into a fine powder. While sencha and matcha come from the same plant (Camellia sinensis), the cultivation and processing methods differ significantly. Understanding this distinction is key to grasping why the global matcha boom is now directly disrupting sencha supply and pricing.

The Matcha Boom Is Reshaping Tea Farm Decisions

The root cause of the sencha price surge is straightforward: farmers across Koka City are rapidly converting their fields from sencha cultivation to tencha, the raw leaf used to produce matcha. According to Shiga Prefecture's own survey data cited in the Asahi Shimbun report, the area of tea fields in Koka City harvested for tencha grew by approximately 70% year-over-year in 2025's first-flush season, reaching 47.4 hectares. As more farmland shifts toward tencha production, sencha supply tightens — driving up prices at auction.

This conversion is being driven by economics. The global appetite for matcha — especially in the United States, where matcha lattes, ceremonial-grade products, and matcha-infused foods have gone mainstream — has made tencha significantly more profitable for growers. A representative of the Kyoto Prefecture Tea Industry Council was quoted as saying: "Since the year before last, there has been an unprecedented matcha boom. It has been embraced by overseas consumers as a health drink, exports have increased, and use in confectionery has also grown."

Koka City Tencha Feeds the Uji Matcha Pipeline

Much of the tencha harvested in Koka City, Shiga Prefecture, is transported to Kyoto Prefecture, where it is processed and sold as Uji Matcha — one of Japan's most prestigious matcha designations. Under the official definition of "Uji Tea" (宇治茶), tea may qualify if it is grown in Kyoto, Nara, Shiga, or Mie Prefecture and finished by a processor within Kyoto Prefecture. This means tencha from Koka City has long been a foundational ingredient in premium Uji Matcha products. With Uji City alone attracting approximately 6 million tourists per year — many of them foreign visitors eager to purchase matcha — demand at the processing and retail end shows no signs of slowing.

Impact on Retail Pricing: What to Expect

The price pressure is already working its way downstream. Yoshinaga Kenji, President of Maruyoshi Omi-cha, a tea manufacturer and retailer based in Tsuchiyama-cho, Koka City, stated that raw material costs for his business in 2026 feel "more than double" compared to last year. He noted that retailers cannot simply pass the full increase to consumers, and that many vendors are expected to respond by reducing package sizes or raising prices by approximately 20%. For U.S. importers sourcing matcha and Japanese green teas, this signals a continued tightening of the supply chain and upward pressure on wholesale pricing.

Key Takeaways for U.S. Matcha Importers and Café Buyers

Supply is tightening at the source. Tencha farmland in Japan's top growing regions continues to expand, but total green tea farmland is not growing — meaning sencha supply is being sacrificed to meet matcha demand.

Prices are at historic highs. The May 2026 Koka City auction recorded the highest average sencha prices ever, with the top lot at ¥180,000/kg (~$1,146 USD) — nine times last year's peak.

Uji Matcha supply chains are under pressure. Koka City tencha is a critical input for Uji Matcha producers. Any disruption or price shift here flows directly into the wholesale matcha market.

Plan ahead for 2026 procurement. If you are sourcing Japanese matcha or sencha for your café or food service operation, early commitment and longer-term supplier agreements may help lock in more stable pricing amid ongoing volatility.

Quality remains a priority in Koka. Industry insiders note that Koka City tencha is particularly prized in Kyoto for its quality — meaning high-grade Uji Matcha supply is especially dependent on this region.

Staying Ahead in a Shifting Market

The 2026 tea season in Japan is a clear signal that the matcha boom is no longer just a consumer trend — it is actively restructuring how and where Japan's tea is grown. For U.S. buyers importing matcha from Japan, staying informed about domestic Japanese market dynamics is essential for making smart sourcing decisions. We will continue to monitor and report on Japanese tea market developments throughout the season.

Source: Asahi Shimbun / Yahoo! Japan News, May 17, 2026 — https://news.yahoo.co.jp/articles/2570cd72e75a83f204852c3c924d7851a9759792
Exchange rate used for USD conversions: 1 USD = ¥157 (as of mid-May 2026).