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The wholesale-price index-based (WPI) inflation in vegetables turned negative by 0.95% in March this year, driven by fall in prices of tomatoes, cauliflowers, cabbage, brinjals among others, but those tracking horticulture feel that the trend is not likely to be sustained in the months of 2013-14 beyond April and prices may again shoot up in the rainy season.
Many analysts said that prices of vegetables generally decline or remain quite low in March or April, since it is concluding months of the Rabi season.
At the outset this thesis may look awkward since the WPI inflation in vegetables stood as high as 32.59% in March, 2012, however deeper analysis showed that
prices in a number of vegetables did fall in March, 2012 as well.
The WPI rate of price increase in vegetables as a category may have fallen below zero in March, but the fall in prices was not across the board.
For instance, onions still saw inflation as high as 94.85% in March, though it moderated from 154.33% in the previous month. Similarly, inflation in potatoes stood 20.06% in March, but it was lower than 45.99% in the previous month.
A number of items saw prices falling in the month of March. For example, lady fingers saw inflation at (-) 29.88% in March, 2013 year-on-year.
Before one could feel elated over cheaper prices of lady fingers, it should be noted that the vegetable is still quite expensive in retail markets (around Rs 70 a kg in Delhi markets for instance), but its prices fell in March, 2013 compared to March, 2012 in wholesale markets. This means that lady fingers were much more expensive in March, 2012, at least in wholesale markets.
Similarly, tomatoes prices fell 26.65% in March, 2013 year-on-year. Cabbage and cauliflowers, which are on way out with the onset of summer, also saw its prices falling 39.57% and 6.08% in March, respectively.
Tapioca (sabu daana) saw its prices falling by 98.57% in March, year-on-year.
Can this trend be sustained over the coming months? "No", said Commission for Agriculture Costs and Prices (CACP) chairman Ashok Gulati.
He said fall in the WPI inflation in vegetables below zero% in March is a short-term fluctuation in prices. "This is a short-term volatility. In five years, prices of vegetables rose much faster than say cereals."
Next time to test whether prices of vegetables are really falling as a trend is to see their behaviour when rains come, he said.
Rains usually spike prices due to disruption in transportation activities.
Gulati said even if prices of say tomatoes fall on a sustained basis, then farmers will be discouraged to sow that vegetable and the next season would rather witness rise in prices. His theory is substantiated by the chart which showed that prices of vegetables changed gears in March this year compared to March last year.
Those, which saw increase last year, witnessed lower prices and those, which saw decrease last year, had higher prices this time.
Ramesh Chand, director National Centre for Agriculture Economics and Policy Research, said falling prices for vegetables as a category may not be sustained and prices may again see upward trend from May onwards.
He said this time production of vegetables has been quite good and this has led to fall in prices in the month of March, which together with April otherwise also see a moderation in vegetable inflation.
Overall vegetables production rose 16,029.1 million tonnes in 2012-13 (first advance estimates) against 15,632 million tonnes in the previous month. Since the figure for 2012-13 were the first advance estimates, the actual production is expected to have risen much more.
WPI Inflation in vegetables:
| WPI Inflation In | March 2013 | March 2012 |
| Vegetables | (-) 0.95% | 32.59% |
| Potato | 20.6% | 18.43% |
| Onion | 94.85% | (-) 24.06% |
| Sweet Potato | (-) 8.77% | (-) 17.51% |
| Tapioca | 98.57% | (-) 32.36% |
| Ginger | 151.2% | (-) 96.74% |
| Green Peas | 9.38% | 29.67% |
| Tomato | (-) 26.64% | 84.36% |
| Cauliflower | (-) 6.08% | 32.27% |
| Brinjal | (-) 1.07% | 43.88% |
| Lady Finger | (-) 29.88% | 63.71% |
| Cabbage | (-) 39.57% | 79.33% |
Source: Commerce & Industry Ministry
