Tomato to get even costlier in weeks ahead; relief only by September

Government has intervened to regulate retail prices

Tomato prices are likely to rise even more and might go up to Rs 300 per kg in the weeks ahead as incessant rains in some areas and lack of adequate showers in others hits production and transportation of the kitchen staple, according to agriculture experts.

“The problem of price rise will go on for some time. No new plantation can be planted amid rains. Prices will continue to rise in weeks to come. It will be a minimum of 2 months before we see prices stabilise,” says Sanjay Gupta, Managing Director and Chief Executive Officer of National Commodities Management Services Limited (NCML).

Retail prices for tomatoes have shot up across the country. The prices spiked from Rs 40 per kg in June to average Rs 100 per kg in the first week of July and further to an average of Rs 200 per kg amid heavy rainfall that has impacted supply from different regions of the country.

The major tomato producing states include Andhra Pradesh, Madhya Pradesh, Karnataka, Gujarat, Odisha, West Bengal, Maharashtra, Chhattisgarh, Bihar, Telangana, Uttar Pradesh, Haryana and Tamil Nadu. These states account for 91 percent of the total production of the country, as per the Ministry of Agriculture.

However, the current supply is only being received from southern and some north-eastern areas, Gupta says.

“The erratic weather has played an important role in disrupting tomato production in the southern and coastal parts of the country. Production in the Himachal area too has been impacted by heavy rainfall. Disruption of highways and transportation has caused major post-harvest losses,” says Indra Shekhar, independent agri-policy analyst and former Director, Policy and Outreach, National Seed Association of India.

Why have tomato prices spiralled?

Tomato is a short duration crop which is very sensitive to heat and extremely susceptible to viruses, says Gupta. Part of the crop was destroyed when an early heat wave hit large parts of India between February- March. Two different viruses also hit yields in Maharashtra and Karnataka earlier this year. Production has also remained low in the southern parts of the country, especially in Maharashtra, as growers blame the extreme heat in May and then unseasonal rainfall and hailstorms in June.

Another reason for the low growth is farmers losing hope of getting fair prices for their produce. “We were discouraged from growing any more vegetables after the prices for onion and capsicum crashed early this year in March-April,” a Nashik farmer, Karbhari Jadhav, told Moneycontrol.

When can we expect tomato prices to stabilise?

Tomatoes generally follow a 60-90 day crop cycle. With heavy rains lashing the tomato growing states, sowing is not possible. It may thus take longer for prices to stabilise.

Most farmers don't sow tomatoes during May and June, Gupta points out. Farmers will only sow it again when rains slow down, he says. Thus, transplantation will happen towards the end of July or early August in most areas. From transplanting, harvesting will take at least 60 days.

However, the production seasons are different across regions. New crop arrivals are expected from Nashik district, Narayangaon and the Aurangabad belt in Maharashtra which has had deficient rainfall. The prices should ideally begin stabilising towards the end of August and early September, Gupta adds.

Vegetables are expensive to grow and need much more care. Regular picking and pesticide spraying needs to be done and unlike wheat/paddy crops where cultivation is fixed, farmers do not necessarily have to grow vegetables. They only do it to support their family and to have day-to-day cash in hand. So, if farmers do not make money, they simply change the crop they are sowing.

Area under vegetables has continued to shrink, especially in the past two years, says Gupta. Supply of all vegetables has come down significantly and has raised prices due to this, he added.

Fears of onion prices rising later this year

The prices of onion are also expected to rise in the October-November period this year, experts feel. “What we are consuming right now is buffer stock from earlier produce. The rains have disrupted the cycle and we may see its effects around October-November,” says Gupta.

“The winter crop of onion may very well have been damaged because of rains. It is a root vegetable and it rots as fields get filled with water. However, impact may not be that bad as Maharashtra has seen deficient rainfall this monsoon,” Sudhir Kumar, Professor of Agriculture at the Jawaharlal Nehru University says.

Government intervenes to regulate retail prices

The Department of Consumer Affairs on July 12 ordered the procurement of tomatoes from Andhra Pradesh, Karnataka and Maharashtra for distribution in major consumption centres to check the increasing retail price.

Tomatoes are being picked up from mandis in Andhra Pradesh, Karnataka and Maharashtra for simultaneous distribution in major consumption centres where retail prices have recorded the maximum increase in the last one month, the ministry has noted.

A statement by the Department of Consumer Affairs has reasoned that apart from the normal price seasonality, temporary supply chain disruptions and crop damage due to adverse weather conditions have led to these sudden spikes in prices. “New crop arrivals are expected soon. Prices are anticipated to cool down in the near future, accordingly,” the ministry adds.