The first tea harvest of 2026 has now come to an end.
As anticipated, Japan’s overall tea production has declined further this year. Prices across various tea categories continue to rise, and some products have even been discontinued. While matcha has attracted much of the attention in recent years, hojicha has not been spared from these challenges.
The rapid growth in global matcha demand has led many tea farms and manufacturers to prioritize their limited tea resources toward higher-value matcha production. As more raw materials are directed into the matcha market, the supply of other tea categories naturally becomes constrained. Hojicha is no exception. As tea leaf prices increase, the cost of hojicha production has risen accordingly.
At the same time, Japan’s tea industry faces a number of ongoing challenges, including shrinking tea-growing areas, an aging workforce, and rising production and transportation costs driven by higher oil and energy prices.
Meanwhile, in Western markets, hojicha has quickly emerged as the next favorite Japanese tea after matcha. Compared with matcha, hojicha offers a milder flavor profile and is generally more affordable, making it more accessible to a wider range of consumers. Fueled by social media trends, hojicha has rapidly spread across global markets as the latest “viral Japanese beverage.”
To be precise, however, the product attracting the most attention is often not traditional brewed hojicha itself, but ratherhojicha powder, which is widely used in lattes, desserts, and baked goods. After all, many of the drinks popularized on social media are made with powdered tea rather than loose tea leaves.
The surge in demand for hojicha powder has further intensified supply pressures. On one hand, domestic hojicha production in Japan continues to decline. On the other hand, overseas demand for hojicha powder continues to grow. In addition, the increase in inbound tourism has boosted demand for hojicha lattes, hojicha desserts, and other hojicha-based products, further driving the need for hojicha raw materials. As a result, supply shortages have become increasingly common.
Many tea producers have already raised prices for hojicha and hojicha powder. Both we and tea manufacturers participants generally expect that matcha prices may continue to rise during the second half of 2026.
For higher-quality Japanese hojicha powder, market prices now typically start from HK$1,000 per kilogram. Faced with rising costs, more commercial operators may turn to lower-grade hojicha powders or even non-Japanese alternatives, a trend that closely mirrors recent developments in the matcha market.
There have even been reports of overseas buyers approaching Japanese tea producers to purchase tea seeds or tea plants, hoping to cultivate tea locally and establish large-scale matcha production outside Japan.
Yet tea is more than just a plant.
Soil, climate, water, terrain, cultivation methods, and generations of accumulated tea-making expertise all contribute to a tea’s character. Even when the same tea cultivar is planted elsewhere, it is difficult to recreate the original flavor and terroir.
Therefore, even if tea cultivation and the production of matcha or hojicha continue to expand around the world, Japanese tea is not defined solely by the tea plant itself.
It is defined by the land, the tea farmers, and the culture and craftsmanship that have been cultivated over generations.
