New Delhi: Grocery runs have transformed into dreaded chores over the last several weeks as India grapples with a persistent surge in food prices. Central to this is the skyrocketing price of tomatoes. But could there be relief on the horizon?
Government data released Monday showed that wholesale inflation in food articles, as measured in the Wholesale Price Index (WPI), shot up to 14.25 percent in July, while retail food inflation, indicated by the Consumer Price Index (CPI), rose to 10.6 percent in the same month.
This food inflation is being overwhelmingly driven by the rise in vegetable prices, particularly the humble tomato. So much so that the matter has even become a hot topic in Parliament.
Finance Minister Nirmala Sitharaman spoke about the government’s moves to make tomatoes more affordable during her speech during the No Confidence Motion debates in the Lok Sabha last week. Several questions were also posed to the government during question hour on the scorching price of tomatoes and what is being done to cool them.
ThePrint explains the rise in vegetable prices, the factors driving the tomato price surge, the government’s mitigation measures, and why the situation may ease soon.
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What is happening with vegetable prices?
The 14.25 percent inflation in wholesale food prices in July was far higher than what was seen in the previous few months — the average was 3.2 percent over the five-month period of February to June 2023.
Within the food articles category in the WPI, the bulk of the inflation is being driven by vegetable prices, which witnessed an inflation rate of a whopping 62.12 percent in July.
This was similar to what is happening in the CPI, which measures the price consumers pay. In this index, food price inflation was driven by 37.3 percent inflation in the vegetables category.
So, is it that all vegetables are getting more expensive and driving food inflation? The answers are yes and no, respectively.
While the prices of all vegetables have been increasing, data with the government’s Department of Consumer Affairs shows that three kitchen staples —tomatoes, onions, and potatoes— have seen the highest spike since the beginning of May, which is when prices started rising.
The price of 1 kg of potatoes increased from an average of Rs 20.5 on 1 May this year to Rs 24 on 13 August — an increase of about 17 percent in about 3.5 months. Similarly, the price of onions increased from Rs 22.6 per kg to Rs 28.1 per kg over the same period, an increase of a little more than 24 percent.
It is the price of tomatoes, however, that has caused so much consternation in households across India, and has taken the debate on vegetable prices to Parliament.
The price of tomatoes was a relatively benign Rs 24 per kg on 1 May. This has risen to an incredible Rs 110 per kg as of 13 August. Note that these are average prices— there are sections of India where prices are well in excess of this.
Why are tomato prices so high?
The current state of tomato prices can be pegged to seasonal factors to a degree, but a confluence of other variables has also resulted in the nosebleed-inducing acceleration in prices.
“The recent increase in prices of tomato is attributed to a combination of factors like crop seasonality, white fly disease in Kolar (Karnataka), instantaneous arrival of monsoon rains in northern part of the country which adversely affected tomato crops in Haryana and Himachal Pradesh, and logistics disruptions in isolated areas due to heavy rains,” Minister of State for Consumer Affairs, Food And Public Distribution Ashwini Kumar Choubey informed the Rajya Sabha in a written reply to a question on 21 July.
According to Radhika Pandey, associate professor at the National Institute of Public Finance and Policy (NIPFP), while it is difficult to pinpoint a distinct seasonal pattern in tomato prices, the data for the last five years shows that the months of April-October do see quite a bit of volatility in tomato prices.
For example, the peak prices in 2020 were seen in July and September, while in 2022, the peak was in June and then again in October.
In addition to this unpredictability are the factors that came into play this year — a premature heatwave and a slight delay in the monsoon. The months of March and April saw unseasonal heat, which not only caused direct damage to tomato crops but also led to pest attacks that further hurt the harvest.
Then, the monsoon hit with a vengeance in some parts of India, especially the southern states, impacting the transportation of the crop.
Vegetables are perishable, and so delays in transportation impacted the quality of the final product that was delivered. This scarcity of good-quality tomatoes led to demand overtaking supply. Higher demand, of course, means higher prices.
Yet another factor at play was that the overall tomato production was lower this year because the sowing of the crop was lower. Driven by a surge in the price of other vegetables such as beans last year, farmers, especially in major tomato-producing state Karnataka, turned to sowing those vegetables instead of tomatoes.
What also cannot be disregarded is the possibility of unscrupulous market actions, such as hoarding tomatoes as prices were rising. Such practices could lead to a greater increase in the rates, allowing hoarders to make a neat profit when selling stockpiled tomatoes.
What is the government doing to ease tomato prices?
During her speech in Parliament last Thursday, Sitharaman said that the government had pushed for the distribution of tomatoes through cooperative societies in Bihar, West Bengal, Uttar Pradesh, Delhi, and Rajasthan.
In Delhi, she said that mobile vans were transporting tomatoes to societies, acting as outlets of the National Cooperative Consumers’ Federation of India (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED).
“As on date, NCCF has distributed 8,84,612 kg of tomatoes in Rajasthan, Delhi-NCR, and Uttar Pradesh and this will continue in the coming days and will be increased also,” she said.
Sitharaman further claimed that tomato prices were on the downswing in certain states.
“Already the prices of tomatoes in the wholesale mandis in Andhra Pradesh and Karnataka have started coming down to below Rs 100,” she said. “As of today, we have booked tomatoes through Kolar mandi (in Karnataka), coming to Delhi at Rs 85/kg.”
Sitharaman further said said that the Indian government has initiated imports of tomatoes from Nepal by removing import restrictions.
Apart from this, the government has even tried to tap the minds of the public for ideas on how to ensure the availability of tomatoes and stability in their price.
“The Department of Consumer Affairs has launched on 30 June, 2023, the Tomato Grand Challenge to invite ideas on comprehensive and focused area interventions in tomato value chain, from cropping and market insights for the farmers to improved packaging, transportation, and storage,” MoS Choubey said in a separate Rajya Sabha reply last month.
The ‘Tomato Grand Challenge’, he added, is open to students, research scholars, faculty members, industry individuals, Indian start-ups, and professionals, and has the overall objective of ensuring “availability of tomato to consumers at affordable prices”.
What is the outlook for tomato prices?
India grows tomatoes in both of the main crop seasons: rabi and kharif, sown in the winter and summer months respectively.
The rabi crop of tomatoes, mainly grown in parts of Maharashtra, Karnataka, and Andhra Pradesh reaches the markets between March and August. This is the crop that has been affected by the high prices.
The kharif crop, grown in Uttar Pradesh, Nashik in Maharashtra, and other parts of the country reaches the markets from August onwards.
The expectation is that this renewed supply will again push down tomato prices, as has been happening in previous years as well.
(Edited by Asavari Singh)
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