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Wholesale vegetable prices soar as demand rises, retail rates to spike too if supply gap stays

Wholesale traders cite a nearly 20% increase in demand for vegetables as restaurants, dhabas, canteens and other eateries have opened since 1 June.

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New Delhi: The unlocking of the economy since 1 June, after over two months of nationwide lockdown to contain the spread of Covid-19, has had an unlikely fallout.

In the last two weeks, wholesale prices of the common kitchen staple — onion, tomato and potato — have doubled in the major mandis (markets) across the country owing to an increase in the wholesale demand for vegetables.

Traders in Azadpur Mandi cite an increase in demand for vegetables by almost 20 per cent on account of the opening of restaurants, dhabas, canteens and eateries since the first week of June.

Azadpur is the biggest vegetables and fruits market in Asia, which supplies to Delhi and the adjoining states of Haryana, Rajasthan and Uttar Pradesh. Besides, 20 per cent of its stock is transported to markets in southern states too.

“It’s due to this increase in wholesale demand for vegetables, the wholesale prices have increased in the mandis,” said Anil Malhotra, member of Azadpur APMC and  Azadpur Fruits and Vegetables Association.

Hike in vegetable prices

Among vegetables, the wholesale price of tomatoes has increased by more than double in the last two weeks.

According to the daily mandi arrival and rate data of Azadpur Agriculture Produce Marketing Committee (APMC), accessed by ThePrint, the rates of potatoes, tomatoes and onions have spiked substantially over the last two weeks among the staple kitchen vegetables.

The wholesale price of tomato has more than doubled from Rs 4.8/kg to Rs 18/kg from 3 June to 18 June, while the mandi prices of onion have also increased from Rs 6.5/kg to Rs 12/kg in the same period. The wholesale rate of potatoes for the same period has shot up from Rs 13/kg to Rs 21/kg.

The spike in wholesale prices of these vegetables is also likely to inflate the retail prices of these commodities. In fact, the wholesale prices of green vegetables like gourd and bhindi have also increased by Rs 5/kg.

Demand-supply gap

The supply of fruits and vegetables is still low as farmers are said to be reluctant to bring their produce to the mandis.

“The demand for fruits and vegetables has increased over the last few days but the supply is still low as compared to the demand because farmers are still reluctant to bring their produce,” Malhotra said.

“The demand-supply chain would balance in at least 2 weeks as farmers would bring in more produce as they will get a fair price as demand increases further. In the past, demand for vegetables came down due to which prices crashed drastically and farmers didn’t get fair prices for their produce,” added Malhotra.

The arrival of these staple kitchen vegetables has also decreased over time at the Azadpur Mandi. The arrival of potatoes has decreased from 590 tonnes to 516 tonnes from 3 June to 17 June while tomato arrival has dipped from 528 tonnes to 381.6 tonnes for the same period.

Raja Singh, a wholesale trader of vegetables at Azadpur Mandi in Delhi, told ThePrint, “At least 100-125 of my trucks, each with 30 tonnes of potato or onion, used to arrive in a week. This has been reduced to just to 15-20 due to lower demand. However, with an increase in demand over the last two weeks the number of trucks have increased to 35-40 and all of them are selling out.”

He added, “Let alone the vegetables, even the price of herbs have shot up over the last few days. The wholesale price of coriander has increased from Rs 20/kg to Rs 42/kg, while mint mandi prices have gone up from Rs 15/kg to Rs 20/kg.” Singh said retail prices of vegetables will also shoot up if the current trend of increase in demand continues but supply doesn’t pick up.

The prices of vegetables in wholesale markets across other metro cities have also increased over the last few weeks. A major spike has been registered in mandi rates of onion, potato and other vegetables.

Pradeep Sonkar, a wholesale vegetable seller in Sealdah Koley market in Kolkata, told ThePrint: “During the lockdown, big retailers like Big Bazaar and Spencer’s completely stopped purchasing products as malls and supermarkets were closed. There is a revival in the business of about Rs 5-10 lakh/week, which is still low, but the demand is growing slowly.”

He added, “Main vegetables like tomato and potato have witnessed a major spike in prices as the mandi rates of tomatoes have gone up from Rs 12/kg to Rs 30/kg in a week. Also, the cost of potatoes has increased from Rs 10/kg to Rs 21/kg over the last few days.”

Also read: ‘Govt sabotaging atmanirbhar plan’ — farmers criticise masoor duty cut as global prices rise

Onion prices still low in Maharashtra wholesale markets

Meanwhile, the onion prices have remained comfortably low in Maharashtra wholesale markets due to a bumper rabi crop. A procurement drive for creation of buffer stock has been started in the markets of Nashik, Pune, Solapur and other Maharashtrian cities, which have ensured ample availability of onions in the mandi.

Mohammad Shaukeen, a wholesale vegetable seller at Vashi APMC in Navi Mumbai, told ThePrint, “The price of onion is likely to remain low as there is daily arrival of around 3,300 tonnes of onions in the mandi. The price of onion is around Rs 11/kg.”

He, however, said the prices of other vegetables like tomato and potato have almost doubled over the last few days to Rs 20-25/kg.”

Also read: Poultry revival begins but industry faces ‘doom’ with Rs 30,000-crore loss this year

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