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The world’s fondness for matcha is about to be tested by steep price increases.

Global demand for the powdered tea has skyrocketed around the world, fueled by consumer interest in its health benefits and by the bright green matcha lattes bubbling up on social media. In the U.S., retail sales of matcha are up 86% from three years ago, according to NIQ, a market research firm.

But the matcha market is troubled. In Japan, one of the biggest matcha producers, poor weather reduced this year’s harvest. Matcha is still plentiful in China, another major producer, but labor shortages and high demand have also raised prices there.

For Americans, there’s the added impact of tariffs. Imports from China are currently subject to a 37.5% tariff, while the U.S. has a 15% tariff on imports from Japan. It’s not clear if tea will be exempted from tariffs because it’s a natural product that’s not grown in significant quantities in the U.S. — an accommodation that the Trump administration has made for cork from the European Union. The Commerce Department and the U.S. Trade Representative didn’t respond to messages left by The Associated Press.

Aaron Vick, a senior tea buyer with California-based tea importer G.S. Haly, says he paid 75% more for the highest-grade 2025 crop of Japanese matcha, which will arrive in the U.S. later this fall. He expects lower grades of matcha to cost 30% to 50% more. Chinese matcha — while generally cheaper than Japanese matcha — is also getting more expensive because of high demand, he said.

“People should expect an enormous increase in the price of matcha this year,” Vick said. “It’s going to be a bit of a tough ride for matcha devotees. They will have to show the depth of their commitment at the cash register.”

Even before this year’s harvest, growing demand was straining matcha supplies. Making matcha is precise and labor intensive. Farmers grow tencha — a green tea leaf — in the shade. In the spring, the leaves are harvested, steamed, de-stemmed and de-veined and then stone ground into a fine powder. Tencha can be harvested again in the summer and fall, but the later harvests are generally of lower quality.

There are ways to cut corners, like using a jet mill, which grinds the leaves with high pressure air. But Japan has other issues, including a rapidly aging workforce and limited tencha production. And despite Japanese agricultural ministry trying to coax tea growers to switch to tencha from regular green tea, many are reluctant to do so, concerned that the matcha boom will fade.

That’s giving an opening to China, where matcha originated but fell out of favor in the 14th century. Chinese matcha production has been growing in recent years to meet both domestic and international demand.

Chinese matcha has historically been considered inferior to Japanese matcha and used as a flavoring for things like matcha-flavored KitKat bars instead of as a drinking tea. But the quality is improving, according to Jason Walker, the marketing director at Firsd Tea, the New Jersey-based U.S. subsidiary of Zhejiang Tea Group, China’s largest tea exporter.

“We are seeing more and more interest in Chinese matcha because of capacity issues and changing perception,” Walker said. “It used to be the idea that it has to be Japanese matcha or nothing. But we have a good product too.”

Starbucks is among the companies using matcha from China for its lattes. The company said it also sources matcha from Japan and South Korea. Dunkin’ and Dutch Bros. didn’t respond when asked where they source the matcha.

Josh Mordecai, the supply chain director for London-based tea supplier Good & Proper Tea, said he is approached almost daily by Chinese matcha suppliers. For now, he only buys matcha from Japan, but the cost to acquire it has risen 40% so he’ll have to raise prices, he said.

Mordecai said he saw more demand for matcha in the last year than in the previous nine years combined. If matcha prices continue to rise, he wonders if consumers will switch to other tea varieties like hojicha, a roasted Japanese green tea.

“We’ll see if this is a bubble or not. Nothing stays on social media that long,” Mordecai said.

Julia Mills, a food and drink analyst for the market research company Mintel, expects the social media interest in matcha to die down. But she thinks matcha will remain on menus for a while.

Mills said matcha appeals to customers interested in wellness, since it contains antioxidants and l-theanine, an amino acid known for its calming effects, and it’s less caffeinated than coffee. Millennials and Generation Z customers are more likely to have tried matcha than others, Mills said.

The traditional way of preparing it, whisking the powder together with hot water in a small bowl, also appeals to drinkers who want to slow down and be more intentional, Mills said.

That’s true for Melissa Lindsay of San Francisco, who whisks up some matcha for herself every morning. Lindsay has noticed prices rising for her high-end matcha, but it’s a habit she’d find hard to quit.

“It’s not just a tea bag in water,” Lindsay said. “It’s a whole experience of making it to your liking.”

David Lau, the owner of Asha Tea House in San Francisco, hopes to keep customers drinking matcha by limiting price increases. Lau raised the price of his matcha latte by 50 cents after the cost the matcha he buys from Japan more than doubled. He’s also looking into alternate suppliers from China and elsewhere.

“We’re in the affordable luxury business, you know, just like any other specialty cafe. We want people to be able to come every day, and once you reach a certain price level, you start to price people out,” he said. “We want to be really cognizant and aware of not doing that.

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AP Video Journalist Haven Daley contributed from San Francisco.

The parents of teenagers who killed themselves after interactions with artificial intelligence chatbots are planning to testify to Congress on Tuesday about the dangers of the technology.

Matthew Raine, the father of 16-year-old Adam Raine of California, and Megan Garcia, the mother of 14-year-old Sewell Setzer III of Florida, are set to speak to a Senate hearing on the harms posed by AI chatbots.

Raine’s family sued OpenAI and its CEO Sam Altman last month alleging that ChatGPT coached the boy in planning to take his own life in April. Garcia sued another AI company, Character Technologies, for wrongful death last year, arguing that before his suicide, Sewell had become increasingly isolated from his real life as he engaged in highly sexualized conversations with the chatbot.

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EDITOR’S NOTE — This story includes discussion of suicide. If you or someone you know needs help, the national suicide and crisis lifeline in the U.S. is available by calling or texting 988.

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Hours before the Senate hearing, OpenAI pledged to roll out new safeguards for teens, including efforts to detect whether ChatGPT users are under 18 and controls that enable parents to set “blackout hours” when a teen can’t use ChatGPT. Child advocacy groups criticized the announcement as not enough.

“This is a fairly common tactic — it’s one that Meta uses all the time — which is to make a big, splashy announcement right on the eve of a hearing which promises to be damaging to the company,” said Josh Golin, executive director of Fairplay, a group advocating for children’s online safety.

“What they should be doing is not targeting ChatGPT to minors until they can prove that it’s safe for them,” Golin said. “We shouldn’t allow companies, just because they have tremendous resources, to perform uncontrolled experiments on kids when the implications for their development can be so vast and far-reaching.”

The Federal Trade Commission said last week it had launched an inquiry into several companies about the potential harms to children and teenagers who use their AI chatbots as companions.

The agency sent letters to Character, Meta and OpenAI, as well as to Google, Snap and xAI.

TIRANA, Albania (AP) — Albania’s prime minister on Friday tapped an Artificial Intelligence-generated ‘minister’ to tackle corruption in his new Cabinet, a project launched with the help of Microsoft.

Officially named Diella — the female form of the word for sun in the Albanian language — the new AI minister is a virtual entity.

Diella will be a “member of the Cabinet who is not present physically but has been created virtually,” Prime Minister Edi Rama said in a post on Facebook.

Rama said the AI-generated bot would help ensure that “public tenders will be 100% free of corruption” and will help the government work faster and with full transparency.

Diella was created in cooperation with Microsoft, using AI’s up-to-date models and techniques to guarantee accuracy in offering the duties it is charged with, an official at Albania’s National Agency for Information Society said.

The official was not authorized to talk to reporters and spoke on condition of anonymity. The agency manages the administration’s information systems.

Diella, depicted as a figure in a traditional Albanian folk costume, was launched earlier this year as a virtual assistant on the e-Albania public service platform, where she has helped users navigate the site and get access to about 1 million digital documents.

Rama’s Socialist Party secured a fourth consecutive term after winning 83 of the 140 Assembly seats in the May 11 parliamentary elections. The party can govern alone and pass most legislation, but it needs a two-thirds majority, or 93 seats, to change the Constitution.

The Socialists have said it can deliver European Union membership for Albania in five years, with negotiations concluding by 2027. The pledge has been met with skepticism by the Democrats, who contend Albania is far from prepared.

The Western Balkan country opened full negotiations to join the EU a year ago. The new government also faces the challenges of fighting organized crime and corruption, which has remained a top issue in Albania since the fall of the communist regime in 1990.

Diella also will help local authorities to speed up and adapt to the bloc’s working trend.

Albanian President Bajram Begaj has mandated Rama with the formation of the new government. Analysts say that gives the prime minister authority “for the creation and functioning” of AI-generated Diella.

Asked by journalists whether that violates the constitution, Begaj stopped short on Friday of describing Diella’s role as a ministerial post.

The conservative opposition Democratic Party-led coalition, headed by former prime minister and president Sali Berisha, won 50 seats. The party has not accepted the official election results, claiming irregularities, but its members participated in the new parliament’s inaugural session. The remaining seats went to four smaller parties.

Lawmakers will vote on the new Cabinet but it was unclear whether Rama will ask for a vote on Diella’s virtual post. Legal experts say more work may be needed to establish Diella’s official status.

The Democrats’ parliamentary group leader Gazmend Bardhi said he considered Diella’s ministerial status unconstitutional.

“Prime minister’s buffoonery cannot be turned into legal acts of the Albanian state,” Bardhi posted on Facebook.

Parliament began the process on Friday to swear in the new lawmakers, who will later elect a new speaker and deputies and formally present Rama’s new Cabinet.