Current Outlook of Japanese Tea

May 2017
 [ I n d e x ]

1. Characteristics of tea production in Japan………………………………………………………………………….………………………….1

2. Outlook of tea production…………………………………………………………………………………………...…….………………………….3
3. Outlook of crude tea price………………………………………………………………………………………………....…….…………...……..4
4. Outlook of consumption/demand of tea…………………………………………………………………………....………………………...5
5. Outlook of tea import/export……………….................…………………………………………………………………………………….....6
6. Tea replanting……..………………………………………………………………………………………..……………………………………………....7
7. Act on Promotion of Tea Industry…………………………………………………………………..…………………………………………..….8
機密性○情報
1. Characteristics of tea production in Japan ○○限り

○ Tea undergoes the following processes before being sold on the market: (i) harvesting fresh leaf, (ii) processing fresh
leaf into crude tea in tea-growing regions, and (iii) blending crude tea into final processed tea (refined tea) in tea
consumption regions. The industrial scale of crude tea is about JPY100 billion.
○ Major tea-growing regions are: (1) Shizuoka, (2) Kagoshima, (3) Mie, (4) Kyoto and (5) Fukuoka. The top-three
prefectures constitute about 70% of the total tea-growing acreage in Japan.
○ Tea production in each prefecture has different characteristics, for example, Shizuoka, Kagoshima and Miyazaki mainly
produce "Sencha," Mie and Fukuoka "Kabusecha," Saga and Kumamoto "Tama-ryokucha," and Kyoto "Gyokuro" and
"Matcha."
○ Change of form of tea and industrial scale ○ Main tea-producing prefectures and characteristics of production
2016 Tea-
Prefecture
Rank growing Acreage Characteristics of production
name
Fresh leaf (in ha)

1 Shizuoka 17,400 Mainly produces Sencha (in particular, deep-steamed Sencha)

2 Kagoshima 8,520 Mainly produces various types of Sencha

Steaming/rolling/Drying 3 Mie 3,000 Japan's largest producer of Kabusecha

4 Kyoto 1,580 Japan's largest producer of Gyokuro and Matcha

JPY95.2 billion 5 Fukuoka 1,550 Mainly produces Kabusecha

Crude tea Source: 2014 Statistics of Agricultural Income 6 Miyazaki 1,420 Mainly produces Sencha

Crude tea (non-trimmed tea 7 Kumamoto 1,350 Japan's third largest producer of Tama-ryokucha
leaf, before removing stems)
8 Saitama 884 Mainly produces Sencha
Blending several types of crude 9 Saga 866 Japan's largest producer of Tama-ryokucha
tea produced in different regions
10 Nagasaki 750 Mainly produces Tama-ryokucha

Refined tea Refined tea (trimmed tea, after Rank

Prefecture
2016 Tea-
growing Rank
Prefecture
2016 Tea-
growing
Rank
Prefecture
2016 Tea-
growing Acreage
name name Acreage (in ha) name (in ha)
(Seicha) removing stems) Acreage (in ha)

11 Gifu 734 15 Oita 446 19 Tokushima 249

12 Nara 706 16 Kochi 392 20 Chiba 194
13 17 Ibaraki 353 - All
Shiga 614 prefecture 43,100
14 542 18 Kanagawa 257 total
Tea for Aichi
Source: MAFF "Statistics on Farmland and Crop Acreage"
drinking 1
 (Reference) Types of tea

Types Characteristics and main producing regions Percentage of crude tea

production/crude tea
price (2015)
[Characteristics] [Percentage of Production]
• Most popular type of tea 58.6%
Sencha Processed by steaming, kneading and drying new shoots. [Crude Tea Price]
[Main Production Regions] JPY1,302/kg
• All regions in Japan
[Characteristics] [Percentage of Production]
• Cultivated under a sun-shielding covering made of straw or cheesecloth 0.3%
Gyokuro under “tana” (ceiling shelf) for about 20 days before harvesting. Processed in [Crude Tea Price]
the same way as Sencha. JPY5,462/kg
[Main Production Regions]
• Kyoto and Fukuoka
[Characteristics] [Percentage of Production]
• Cultivated under a sun-shielding covering made of straw or cheesecloth for 5.4%
Kabusecha about one week before harvesting. Processed in the same way as Sencha. [Crude Tea Price]
[Main Production Regions] JPY1,552/kg
• Mie and Fukuoka
[Characteristics] [Percentage of Production]
• Cultivated under a sun-shielding covering from three weeks to one month 2.8%
Tencha before harvesting (which is longer than that of Gyokuro). Processed by drying [Crude Tea Price]
(Matcha) tea leaf without kneading. JPY3,134/kg
• Matcha is a powdered tea made by grinding Tencha with a stone mill.
[Main Production Regions]
• Kyoto and Aichi
[Characteristics] [Percentage of Production]
Tama- • Unlike Sencha, a trimming process is not applied to Tama-ryokucha so Tama- 2.8%
ryokucha leaf is round. [Crude Tea Price]
ryokucha [Main Production Regions] JPY1,644/kg
• Kumamoto, Saga and Nagasaki

Source: Percentage of crude tea production/crude tea price (for all crop seasons) is based on data from the Japanese Association of Tea Production.
Reference: Gyokuro, Kabusecha and Tencha are collectively called "Ooicha." 2
 2. Outlook of tea production
○ Growing acreage is declining slowly.
○ After picking up in 2004 when the production volume exceeded 0.1 mil. tons due to increased demand in green tea
beverages, tea production volume has been on a decline. In recent years, production volume is around 0.08 mil. tons a
year.
○ Commercial tea farm are expanding the scale of tea production acreage, especially in Kagoshima Prefecture.
○ Change in growing acreage per commercial tea farm in major tea-
producing prefectures
(ha)
○ Change in tea growing acreage/production volume
Shizuoka Kagoshima Mie Kyoto Fukuoka Miyazaki Kumamoto

Growing acreage (in 1,000 ha)

Production volume (in 1,000 tons)

120 60
生産量
Production volume 面積
Growing acreage 2000 0.7 1.5 0.5 0.9 0.5 1.2 0.6
50 50 49 49
49 48 48 47 2005 0.8 2.1 0.9 1.1 0.8 1.7 0.8
100 47 46 46 50
45 45
44 43
2010 1.0 3.0 1.3 1.3 0.9 2.2 1.1
80 40
101 2015 1.3 4.7 1.7 1.7 1.2 3.0 1.2
100 94 96
92 Source: Census of Agriculture and Forestry; the growing acreage of commercial tea farm in
92 88
60 84 86 85 84 80 30 2010 is an estimate.
85 84 80
○ Change in number of commercial tea farm in major tea-producing
40 20 prefectures
All
Shizuoka Kagoshima Mie Kyoto Fukuoka Miyazaki Kumamoto prefecture
20 10 total

2000 24,019 4,309 4,598 1,330 2,217 820 1,277 53,687

0 0
14 2003
2002 15 2004
16 2005
17 2006
18 2007
19 2008
20 2009
21 2010
22 2011
23 2012
24 2013
25 2014
26 2015
27 2016
28 2005 17,731 3,072 2,294 1,035 1,629 642 973 37,617

Source: MAFF "Statistics on Agricultural Production"; 2016 production 2010 13,933 2,216 1,455 825 1,385 513 695 28,116
volume is a preliminary data.
2015 9,504 1,599 941 631 962 373 512 19,603
Source: Census of Agriculture and Forestry
3
3. Outlook of crude tea price

○ Tea price was on an upward trend until 2004 due to increased demand in PET-bottle green tea
beverages; however, after 2004, slowdown in demand is pushing the crude tea price downward.
○ Tea price significantly differs depending on (i) price differences between types of tea and (ii) price
differences between crop seasons, in addition to tea quality, significant affecting tea farmers.

○ Change in tea price (crude tea and regular Sencha) ○ Change in tea price per crop season (Crude tea
JPY/kg produced in 2015) Unit: JPY/kg
3,500 Ichibancha Ooicha Sencha
Other
type of
Nibancha Bancha green
3,000 Sanbancha
Gyokuro Kabusecha Tencha Sencha
Tama-
Average for all tea harvesting season ryokucha tea
2,500 First crop
of tea 5,462 1,900 3,995 1,994 2,053 489 1,364

2,000 Second
crop of tea － 845 1,921 671 772 326 691

1,500 Third crop

of tea － 683 － 405 454 318 279
1,000 Autumn-
winter － － － 342 － 287 387
500 Bancha
Average
for all crop 5,462 1,552 3,134 1,302 1,644 318 700
0 season
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Data from the Japanese Association of Tea Production Source: Data from the Japanese
Association of Tea Production

(Reference) Change in price of import Chinese green tea Unit: JPY/kg

2009 2010 2011 2012 2013 2014 2015 2016

245 252 261 285 382 476 582 520

Source: Ministry of Finance, Trade Statistics (CIF price)
4
 4. Outlook of consumption/demand of tea
○ Consumption volume of green tea (leaf tea), which had been on a declining trend, has recently remained unchanged.
PET-bottle green tea beverage product is on an increase.
○ The total of annual expenditure per household of green tea (leaf tea) and tea beverage product is about JPY10,000;
however, the amount of expenditure of tea beverage product has come to exceed that of tea leaf, showing a consumer
shift to a more convenient style of tea consumption.
○ On the other hand, the consumption volume of soda and mineral water has been increasing.
○ Change in consumption volume of leaf tea per household
(g) ○Amount of annual expenditure for green tea leaf/tea
1,200
beverage product per household
1,000 1,140g
856g
800 緑茶
Green tea (leaf tea) 茶飲料
Tea beverage product
(JPY)
600 12,000
400 10,559 10,831

200 10,000
5,749 6,635
0 4,464
14年
2002 15年
2003 16年
2004 17年
2005 18年
2006 19年
2007 20年
2008 21年
2009 22年
2010 23年
2011 24年
2012 25年
2013 26年
2014 27年
2015 28年
2016
8,000
Source: Ministry of Internal Affairs and Communications, Household Statistics

○ Change in consumption volume of soft drinks

Consumption volume per person (liter/person)

29.3
30.0 6,000
Soda 6,095
Coffee beverage 5,378
25.0 23.9
4,000
23.4 4,196
20.0 20.5
Green Tea Beverage 2,000
In 2015, consumption
15.0 volume of green tea-
Mineral water beverage product
reached a record-high.
10.0 Black tea beverage 0
14年
2002 15年
2003 16年
2004 17年
2005 18年
2006 19年
2007 20年
2008 21年
2009 22年
2010 23年
2011 24年
2012 25年
2013 26年
2014 27年
2015 28年
2016
7.5
5.0 5.3
Oolong tea beverage From 2007, amount of expenditure
for tea beverage product exceeds
0.0 that of green tea leaf.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
13年14年15年16年17年18年19年20年21年22年23年24年25年26年27年
Source: Ministry of Internal Affairs and Communications, Household Statistics
Source: Japan Soft Drink Association
5
 5. Outlook of tea import/export
○ Surged in 2004 due to green tea beverage materials demand, tea import turned to decline as percentage of domestic tea
increased, decreasing to only 20% in ten years.
○ Thanks to growing enthusiasm for Japanese food and health awareness in foreign countries including the U.S., export
volume saw a four-fold increase in ten years. The U.S. accounts for about 40% of Japanese tea exports.
○ In 2016, green tea export value increased from 2015 by 14%.

○ Major countries importing tea from Japan (top

five countries/regions, 2016)
○ Change in import/export of green tea (Volume of export from Japan by country)

U.S.
(in tons) Taiwan
26%
20,000 35% Singapore
4% Germany
15,000 Export volume (t)
8% Canada
Import volume (t) 8% 19%
10,000 Other countries

2,942 4,127
5,000 1,625 1,958 2,387 3,516 4,108 ○ Major countries exporting tea to Japan (top
1,096 2,232 2,351
1,576 1,701 five countries/regions, 2016)
599 762 760 872
(Volume of import to Japan by country)
0 1%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1% 1%
3%
5,000 3,473 China
4,875 4,180 3,618
5,865 5,393 8% Australia
7,326 5,906 5,473
10,000 Vietnam
10,242 9,591
11,790 11,254 Myanmar
15,000
15,187 Brazil
17,739 16,995 85% Other countries
20,000

Source: Ministry of Finance, Trade Statistics (data for

(Source: Ministry of Finance, Trade Statistics) the period from January to December FY2016) 6
6. Tea replanting
○ About 30% of trees of tea fields are aged 30 years or older, raising concern about decline in yield and quality.
○ "Yabukita" accounts for more than 70% of all varieties of tea grown in Japan, resulting in concentration of the tea
plucking season. In consequence, negative impacts have arisen, such as concentration of crude tea processing works,
quality degradation due to delayed plucking, and damaging distinctive characteristics of tea flavor.
○ To address these issues, a program has been in place from FY2011 to support tea farmers in replanting tea trees.

○ Farm acreage categorized by tree age (FY2011) ○ Farm acreage categorized by tea cultivar
(ha)
native
Kanayamidori, Asatsuyu, Others, 8%
10,000 1% variety, 2%
1%
33% Sayamakaori,
8,000 2%
22% Okumidori,
6,000 20% 3%
13% Saemidori,
4,000 3%
11%
Yabukita,
2,000 Yutakamidori, 74%
6%

0
Farm with -10 years 11-20 years 21-30 years 30 years or
未成園 ～10年 11～20年 21～30年 30年以上
immature trees older
Source: MAFF survey Source: MAFF survey (FY2015)

○ Significance and advantages of replanting

• Planting young tea trees can improve quality and productivity (for a tea field with old trees, tea quality and
yield is declining due to aging of root systems and decline in the nutrient/moisture preserving ability of
soils).
• Planting good cultivar makes it possible to enhance added value and create new demands.
• Combining varieties with different crop seasons can mitigate weather and natural disaster risk and avoid
concentration of harvesting and processing work. 7
（参考）
7. Act on Promotion of Tea Industry and Tea culture
○ "Act on Promotion of Tea Industry and Tea culture" came into effect on April, 2011.

1. Purpose of Act
The purpose of this Act is to provide for the development of basic policies by the Minister of Agriculture, Forestry and Fisheries, and to take
various measures such as securing stable business management of tea producers, expanding consumption, promoting food education
using tea to contribute to such consumption, promoting export and disseminating knowledge on tea tradition, so as to contribute to the
achievement of sound development of tea industry and healthy and affluent lives of nationals.
2. Summary of Act
(1) Development of basic policy (Article 2)
The Minister of Agriculture, Forestry and Fisheries shall provide for a basic policy on the following matters:
(i) significance and basic policy for tea industry and promotion of tea culture;
(ii) setting a target for production quantities according to long-term perspective on tea demands;
(iii) measures for the promoting tea industry;
(iv) measures for the promotion of tea culture; and
(v) any other matters necessary for the promotion of tea industry and tea culture.
(2) Development of promotion plans (Article 3)
Prefectures shall make an effort to develop the promotion plan in accordance with the basic policy.
(3) Assistance measures by the national and local governments (Articles 4 through 10)
The national and local governments shall make an effort to implement the assistance measures in relation to the following matters:
(i) securing stable business management of tea producers (e.g. improving environment of tea fields, assistance in replanting of tea trees
and promotion of disaster prevention);
(ii) improvement of processing and distribution (assistance for projects for creating new added value through integral collaboration of
agriculture, manufacturing, retail and other sectors)
(iii) promotion of quality improvement;
(iv) promotion of consumption;
(v) promotion of export;
(vi) promotion of tea culture; and
(vii) commendation of contributors to tea industry and tea culture.
(4) Assistance of national government (Article 11)
The national government must make an effort to implement necessary measures such as providing information, advice and financing to
local governments.
8