Bay Area cafes and bakeries say they’re taking a financial hit because of it, and at some point matcha drinkers could feel the pinch as well.

“There’s just not enough to go around, long story short,” Asha Tea House co-owner David Lau said.

Japan, where nearly all of the world’s matcha is produced, has significantly less supply than usual after experiencing its hottest year on record and a significant drop in the number of matcha growers. On top of that, global demand continues to surge, especially for ceremonial matcha – the priciest, highest quality version.

“That grade is what grade we use,” Matsu Matcha owner Alan Lim said. “That grade, the price goes up the most.”

Lim opened Matsu Matcha in Santa Clara last week. He said he’s paying 60% more for ceremonial matcha than it cost a year ago. But rather than switch to a lower quality matcha at a lower price, Lim is swallowing some of the costs himself while keeping prices for a matcha latte between $6 and $7.

“We understand nowadays everything went up,” Lim said

Lau said the cost of importing ceremonial matcha has more than doubled, but for his customers it’s just 50 cents more for a matcha latte.

“We want to charge a fair price for a great product and want to build loyalty and things long-term,” he said.

He worries about selling out of matcha before next year’s crop arrives. For now, he’s not selling any additional wholesale matcha to other businesses and conserving what little he has left.