Economy News

Tomato prices soar amid supply crunch

Modal retail prices double the level two months ago

Retail prices of tomato have crossed Rs 75/kg across several cities, as heavy rains in Himachal Pradesh and Uttar Pradesh have disrupted supplies, while output is hit by heatwaves in the northern states.

Average modal retail prices of tomato across the country according to the department of consumer affairs rose to Rs 50/kg on Saturday from Rs 25/kg prevailed two months back. The wholesale prices rose to Rs 40/kg on Saturday from Rs 20/kg prevailed a month back.

However average retails prices were much higher at Rs 100/kg a year ago because surplus rainfall in hilly states disrupted supplies prompting the government to sell tomato at subsidised prices.

At Delhi’s Azadpur mandi, the largest wholesale market for fruits and vegetables in Asia, tomato prices have risen to a range of Rs 50 – Rs 60/kg currently from Rs 10 – Rs 20/kg prevailed a month back.

“Prices are not likely to come down in the next couple of weeks because of supply constraints due to heat wave impacting the harvest in the northern states and heavy rainfall in the Himachal Pradesh and Uttarakhand is likely to impact supplies,” Ashok Kaushik, president, Azadpur market tomato association, told FE. Kaushik said that currently bulk of supplies are from Karnataka and supplies from Maharashtra and northern states would ease prices by next month.

“Harvesting in Maharashtra will commence by the middle of August and prices are likely to fall by next month,” Uday Deolankar, adviser to the Maharashtra agriculture marketing department, said.

The benchmark mandi prices of tomato at Kolar, Karnataka, rose by 65% to Rs 3300/quintal on Saturday from its Rs 2000/quintal prevailed a month back.

According to the agriculture ministry’s assessment, the targeted kharif tomato area this year is 0.27 million hectare (MH) as against 0.26 MH sown last year. “Crop conditions are reported to be good in major producing areas of Chittoor in Andhra Pradesh and Kolar in Karnataka and in Kolar, picking of tomatoes have started and will hit the market within a few days,” as per an official note.

Tomato production is estimated at 21.23 million tonne (MT) in 2023-24 crop year compared to 20.42 MT in the previous crop year.

Inflation in tomatoes last month was 40.96% on year while prices rose by 202% a year ago. Subsequently September last year prices started to decline.

Around 18 states including Madhya Pradesh, Gujarat, Maharashtra, Chhattisgarh, Odisha, West Bengal, Telangana, Karnataka, Tamil Nadu and Punjab contribute to the country’s tomato production.

According to an official note, the cycle of planting and harvesting seasons and variation across regions are primarily responsible for price seasonality in tomatoes. “Tomato supply is spread across the country, any production vulnerability in any of the states disturbs the supply chain,’ the note stated. The department has identified June-August and October-November as lean production months when prices rise during these months.

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