Tomato prices soar, hitting already constrained family budgets

Tomato prices are shooting up, disturbing household budgets, which are already reeling from costlier edible oil and pulses for the past few months. According to the data from the Department of Consumer Affairs, the retail price of tomatoes in Delhi rose 79 per cent between October 1 and November 25 — from Rs 43 a kg to Rs 77 a kg.

In Mumbai, it became costlier by 63 per cent, going up from Rs 30 to Rs 49 during the same period. In Bengaluru, the price rose from Rs 18 to Rs 88, an increase of 389 per cent. In Patna, it went up from Rs 30 to Rs 60, a 100 per cent jump.

The price jump has been more in southern and eastern parts of the country than in northern and western areas.

A big reason for this is the late withdrawal of the monsoon from the southern peninsular India and the subsequent heavy rain. The rain has caused extensive damage to the standing crop in Andhra Pradesh and Karnataka, lowering their supplies and thus pushing up prices.

The depression in the southern peninsular region persists and is causing rain in key cluster areas of Andhra Pradesh and Karnataka.

In Maharashtra and Madhya Pradesh, which too are major producers, there was a decline in the arrival of the re-transplanted crop in the past few weeks due to rain. However, the crop condition in these two states is reported to be all right.

Reports said the rabi crop of Punjab, Uttar Pradesh, Haryana, and Himachal Pradesh was delayed due to rain in October and is expected to be in the market only by the end of November. Tomato prices will not go down much until early or mid-December, when the rabi crops hit the market.

Sources said a decline in prices was anticipated by mid-November but since the India Meteorological Department had forecast further rain in the southern peninsular region, prices were not expected to go down.

A preliminary assessment by the government in early October showed that tomatoes were sown in about 247,000 hectares this kharif season. The crop in about 4,000 hectares was damaged due to rain.

Last year, during the kharif season, some 250,000 hectares of land was brought under tomatoes. However, since then both the crop condition and weather patterns have undergone changes, which will have an impact on the harvest.

A CRISIL note said tomato prices might stay elevated for two more months.

“Tomatoes account for ten per cent of vegetable production in India. With standing crops damaged by excess rains in Karnataka (105 per cent above normal), Andhra Pradesh (40 per cent above normal) and Maharashtra (22 per cent above normal), which are key suppliers of tomato during October-December, supply is down materially,” the note said.

The retail price index of tomatoes fell 8.40 per cent in October, albeit lower than the 45.57 per cent in September. However, it was largely due to the high base effect of last year. If one looks at month-on-month movements, the index was up 53.59 per cent in October. It was down 5.3 per cent in September month-on-month.

CARE Ratings Chief Economist Madan Sabnavis said tomatoes had a weighting of 0.57 per cent in the consumer price index and hence even the doubling of price would push up the index by 0.57 per cent. “This is quite significant,” he said.

Sowing in November has been held off due to floods and rain.

“Tomatoes, unlike onions, cannot be imported and hence we may have to wait for a month or so before prices stabilise,” Sabnavis said.

Prices are expected to decline by 30 per cent from the current high levels in two to three months, the CRISIL note said. ICRA Chief Economist Aditi Nayar said once vegetable prices started rising, the trend tended to stay uncomfortable for a few months.

“In the current context, higher vegetable prices are compounding the impact of elevated commodity and freight costs, offsetting the positivity engendered by the fuel tax cuts,” she said.