The Yokoshu disaster cannot be interpreted as a decline in Ito En's profits.
The recent floods have made visible the concentration risks in the jasmine tea supply chain. However, the material that should be dealt with in the stock market is the distance between the fact that Yokoshu was affected by the disaster and the hypothesis that the profits of Japanese companies will deteriorate.
Hengshu is a huge concentration area for fresh jasmine flowers and flower tea. According to local official data, the cultivated area in 2025 will be 180,000 yen, the annual production of fresh flowers will be over 150,000 tons, and the world market share will be over 60%. Moreover, the harvest season is from April to October, and July is a bad time to experience flooding. Flowers are used for flavoring immediately after being picked, so the shutdown of not only agricultural land but also roads, electricity, collection markets, and chimney factories will hurt the supply.
ここまでは確認できます。 What remains unknown is the extent to which the damage has affected flower volumes and export prices. It is also impossible to see the tea leaf inventory held by the manufacturer or the multi-year contract. It is too early to factor in a major blow to consolidated results based on short-term disaster reports.
what is happening
China's Emergency Management Department announced that extreme heavy rains from July 5th to 6th caused river water levels in Hengzhou to rise sharply, causing several water reservoirs to become overwhelmed. According to information from the Guangxi region, holes were caused by the embankments at the Liuling Reservoir and Yunmyo Reservoir, and the downstream area was widely affected.
Although the headline `Water storage collapse'' is used in public announcements, the status of individual facilities needs to be read more carefully. At the very least, the concrete expression that can be confirmed for Rokuen and Yunmyo is `Mantei-kakuchi,'' and it cannot be confirmed that the dam itself completely collapsed. Although widespread damage to farmland and fishponds has been reported, as of July 11, damage statistics for only jasmine farmland have not been published.
Why is concentration of production areas effective for jasmine tea?
Jasmine tea is made using a chimney that transfers the scent of fresh flowers to tea leaves such as green tea. Even if the raw tea leaves themselves can be transported from another production area, if the fresh flowers that determine the quality of the aroma and the processing know-how are gathered in one area, substitution will not occur quickly.
This is not something that suddenly appears in the financial statements of Japanese companies. The first thing that moves is the flower price in Hengshu, followed by the export price of finished tea leaves and the purchasing price of domestic manufacturers. By the time you reach the store price and gross profit rate, there will be a considerable difference depending on inventory and contract terms.
Yokoshu's 60% global market share cannot be read as 60% dependent on Japanese companies' procurement. Supplies from Fujian, Yunnan, Sichuan, Vietnam, etc., manufacturer's proprietary blends, and previous year's inventory also need to be considered.
How do you see the impact on Japanese stocks?
| Brand name | Contact points that can be checked | Current view |
|---|---|---|
| Itoen (2593) | The raw material for "Relax JASMINE" is jasmine tea (China). Promoting unique ingredients that use 1.5 times more flowers than regular jasmine tea | The point of contact is the most obvious. Dependency on Yokoshu, inventory, sales and profits by brand are not disclosed, and the impact of consolidation cannot be calculated. |
| Suntory Foods International (2587) | “Special Tea S Jasmine” uses jasmine tea from China and Vietnam. | While Vietnamese procurement will serve as a buffer when China's supply is tight, procurement prices could rise if alternative demand concentrates. |
To be honest, lumping restaurant stocks together as ``jasmine tea shock stocks'' is a bit preconceived. The contact point of eating out Chinese food alone is weak. If jasmine tea accounts for a small portion of drink costs, even if prices rise, the impact on consolidated profits will be offset. When it comes to eating out, rice, meat, oil, labor costs, and logistics costs are more likely to appear in business performance explanations.
For two beverage companies, you can check the connection with Chinese products from the ingredient display. However, since the sales composition of the jasmine tea brand and the proportion of products produced in Hengshu have not been disclosed, it is not possible to mechanically calculate the impact on profits from the area affected.
What ITO EN should really look at is the gross profit margin of its beverages as a whole, rather than the rise in the price of jasmine tea raw materials itself. The impact of purchasing only jasmine tea is difficult to disclose and is hidden in the costs of tea leaves, PET bottles, and logistics costs. Even if raw material prices were to rise, the impact on consolidated profits would be small if it could be absorbed through brand-specific price increases and capacity adjustments. On the other hand, if you delay passing on the price to protect sales volume, your gross profit margin will gradually suffer.
ITO EN's fiscal year ending April 2026 saw an increase in sales but a decrease in operating income. Investors who hold ITO EN stocks are not looking at the purchasing price of jasmine tea itself. It depends on whether the gross profit margin of the beverage business will return or whether sales volume can be maintained even after the price increase.
Where does it turn into bad news?
The current baseline is that the impact on corporate performance will be limited as it will be absorbed by the previous year's inventory and contracts. This situation will be disrupted if flower prices continue to rise throughout the summer and the recovery of chimney factories and logistics is delayed. If Japanese manufacturers start discontinuing products or raising prices, it will turn from mere production news to an indicator of business performance.
If stock prices were to react in the short term, it would be when local flower prices skyrocketed or manufacturers suspended products before the actual production reduction was confirmed. However, considering ITO EN's consolidated scale, it is difficult to imagine that the raw material costs for jasmine tea alone will significantly change the company's earnings forecast. Even if a theme is bought in advance, it will not last long unless there is a comment from the company.
Alternative procurement is also not a panacea. There is room to absorb the shortage by sourcing from other production areas in China or Vietnam, changing the fragrance design, and reviewing the product composition. However, it takes time to procure alternatives that maintain quality, and at the same time, if purchases become concentrated, prices in other production areas will also rise. It is one thing to have an alternative production area, but it is another to be able to immediately replace it with the same quality, quantity, and price.
When news of a disaster comes out, even companies with alternative beverages tend to be bought as beneficial stocks. The demand for substitutes such as rooibos, barley tea, and black oolong tea is easy to understand, but beverage shelves will not change based solely on raw material prices. Sales plans, production lines, and brand power come first. Searching by association only tends to peel off unless additional materials are available.
Next number to check
最初に見るのは横州の生花価格です。被災報道が大きくても、花価が平常圏に戻るなら、日本企業の調達コストまで波及しにくい。次に窨製済みジャスミン茶葉の輸出価格。最後に伊藤園やサントリー食品の売上総利益率。 This is the order.
You should also take a look at the affected area of jasmine farmland, restored area, and 2026 yield forecast announced by the Yokoshu City government and agriculture department. Japan's import statistics allow us to track the quantity and unit price of tea produced in China, but the statistical classification does not necessarily allow for a clear separation of only jasmine tea.ここは読み過ぎない方がいい。
In ITO EN and Suntory Foods' financial results briefings, we look at tea leaf procurement, raw material prices, price revisions, and volume trends. Especially for ITO EN, both the gross profit margin and volume of the entire beverage business, not just jasmine tea. If the gross profit margin recovers due to a price increase but the volume declines, this would not be an honest stock price factor.
It is also important not to confuse the severity of the disaster with the size of the investment theme. Even if the human and regional damage is severe, if the cost ratio of the raw materials in question is small for Japanese listed companies, the impact on profits will be limited. Conversely, if disease damage or decline in tree vigor appears later after flower fields are flooded, the decrease in supply will be greater than the initial statistics. It's best not to decide either way until you see the numbers.
summary
The Hengshu flood cannot be ignored because the disaster area coincided with one of the world's leading jasmine producing areas. Ito En and Suntory Foods have been able to officially confirm that they use Chinese jasmine tea in their products, giving them reason to follow future procurement trends.
What we can confirm at this point is that major production areas suffered flood damage during the harvest season. There are not enough numbers yet to talk about the supply crisis and declining profits of listed companies.
First, the flower price of Yokoshu. Next is the export price. After that, manufacturers raised prices and discontinued products. It's not too late to start worrying about ITO EN's profit margin.
Related pages
source
- 中国応急管理部「国家防总办公室联合工作组赴广西南宁横州市协助指导水库溃坝抢险救灾工作」（2026年7月8日）
- 広西壮族自治区政治協商会議「自治区党政主要领导在南宁横州一线指挥抗洪抢险救灾」（2026年7月8日）
- 国家林業草原局「全球每10朵茉莉花6朵来自广西横州」（2026年4月30日）
- 伊藤園「Relax JASMINE PET 1L」商品情報
- 伊藤園「リラックスジャスミンティー」ブランド情報
- サントリー「特茶s ジャスミン」商品情報
- ITO EN, Suntory Beverage & Food International's latest financial results disclosure and each company's official product information (confirmed on July 11, 2026)