Every Saturday, we bring you a deep dive into one big story from the week. For example, a political announcement, or a new scientific, climate or health study. Today we’ve brewed up something a little different, though. We’re taking a closer look at your morning matcha order.

The most expensive matcha in the market is priced at $2,000 per kg. While most mere mortals spend significantly less than that, a typical matcha latte from the local cafe will set you back upwards of $7.

Global retailers say Japanese matcha prices have jumped between 30% and 75% in 2025 alone. So, where has this increase come from and what does it mean for everyday Aussies?

By the way, these are the kind of topics we cover in TDA Finance. I’d love you to try it out - when you subscribe to a new TDA newsletter, it helps us grow as a company and build more and more ways to help you understand the world around you, one cup at a time.

Let’s dive in.

Matcha is finely powdered green tea from Japan. Unlike with most teas (where the leaves are steeped in hot water), matcha drinkers consume the entire leaf (in powder form). That's why matcha has that vibrant green colour and packs so much caffeine.

Gram for gram, matcha contains more caffeine than coffee. However, more beans are required to make a shot of coffee, so comparing standard serving sizes, coffee drinkers end up with more of a caffeine hit.

The global matcha market was worth $US4.3 billion in 2023 and is projected to hit $US7.4 billion by 2030. Australian cafes now charge as much as $10 a cup, and U.S. retail sales have surged 86% in just three years.

For Japan, matcha is big business. It exported $US1.85 billion worth of matcha in 2024, up 20% from the previous year.

If there’s increased demand for a product, you ramp up supply – that’s economics 101. But with matcha, it’s not that simple: you can’t simply plant more.

New tea plantations require five years to reach maturation. For matcha companies, this translates to a five-year wait before they can see a return on their investment.

Along with the issue of time, there’s a labour problem.

Farmers must place the tea plants in shade for 3-4 weeks before harvest to bring out the flavour. After harvesting, leaves are steamed, dried, and de-veined. Here's the kicker: after all that, only 50% of the original leaf weight becomes usable matcha powder.

Matcha farming is a craft steeped (pun intended) in tradition and history, and with a greater portion of young adults in Japan moving away from agricultural regions and towards metropolitan centres, there are fewer carrying on the trade. In fact, the average matcha grower is now over 70 years old.

Over the past few years, Japan’s key matcha farming regions have endured serious drought. According to media reports, some farmers have lost between 20-30% of their harvest due to extreme heat.

In saying all that, farmers are indeed growing more matcha. Many have adapted their crops after years of growing other teas to meet the international demand. According to the Japanese Tea Production Association, the country produced 5,336 tons of tencha (unground matcha leaves) in 2024, 2.7x up from 2014 levels.

Matcha can be grown outside of Japan. For example, China is actually the world’s largest exporter of matcha to global markets. But many argue against matcha farming outside of Japan, citing the unique and nuanced Japanese traditions and conditions required to grow matcha.

André Fasciola, CEO of Matcha.com, said in a recent interview: “What makes Japanese matcha great is 800 years of expertise, the ideal geological environmental growing conditions, and perfection of the equipment and process”.

Fasciola said attempts to produce matcha elsewhere “lack the expertise, equipment, soil conditions, and the right tea plant cultivars”.

According to Harvard analysis, matcha contains “an abundance of antioxidants and phytochemicals,” substances linked to positive health outcomes.

Findings in the European Journal of Nutrition show matcha can help lower blood pressure and cholesterol, as well as inflammation.

“The amino acid L-theanine, found in matcha, has been associated with improved concentration and alertness,” Harvard also noted.

While your daily cup is probably going to get more expensive in the next few years, you can’t put a price on feeling like you’re making better choices than the rest of us coffee drinkers.

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