Tomato prices likely soften in next 2-3 weeks as supplies from hilly states commence

Tomato prices likely soften in next 2-3 weeks as supplies from hilly states commence

Consumers reeling under the impact of sharp spikes in tomato prices could get relief soon as prices of stable vegetables are likely to moderate in the next two to three weeks due to commencement of arrivals from hilly states of Himachal Pradesh and Uttarakhand.

Since the last week of June, retail modal prices of the vegetable have started to increase and hit Rs 100/kg on June 30, a 400% increase from the price prevailed a week ago.

Most traders in Delhi, Maharashtra and Karnataka to whom FE spoke said mandi prices would remain elevated for the next few weeks before witnessing a decline.

“Tomato arrivals have commenced from the hilly states, it would reflect in the softening of prices in next two weeks,” Surendra Budhiraja, a tomato trader and member of Azadpur mandi said. He said that there has been some disruption in supplies because of rains in the hills causing disruption of transportation.

At Delhi’s Azadpur mandi, the largest wholesale market for fruits and vegetables in Asia, tomato prices rose to Rs 1,800–2,000 per 25 kg bag on Saturday against Rs 900-1,000 a bag prevailed in the middle of last month.

Hilly states have around 10% share in the country’s tomato production and help improve supplies in the northern region.

“With improved supplies from hilly states in near future, we should expect considerable softening of prices,” Rohit Kumar Singh, Secretary, Department of Consumer Affairs, told FE.

However, the mandi prices in Maharashtra and Karnataka, which have a combined share of 17% in production of the key vegetable, would soften once new crops start arriving in the market by later parts of this month.

“Harvesting in Maharashtra and Karnataka will commence by the end of July and prices are likely to fall by early next month,” Uday Deolankar, adviser to the Maharashtra agriculture department, said.

The benchmark mandi prices of tomato at Kolar, Karnataka, declined by 30% to Rs 4,670/quintal on July 7 from its peak of `6,670/quintal on June 30. At the beginning of last month, mandi prices were Rs 2,000/quintal.

Delay in the arrival of monsoon and higher-than-normal temperature that prevailed in April and May in key producing states of Karnataka and Maharashtra pushed up prices sharply.

According to a department of consumer affairs note, ‘tomato supply is spread across the country, any production vulnerability in any of the states disturbs the supply chain,’. The department has identified June-August and October-November as lean production months when prices rise during these months.

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

Retail inflation in vegetables, which remained in the negative zone since November last year, declined by 8.18% in May, 2023. Interestingly, inflation in tomatoes had fallen at a sharper rate of 52.8% last month.

Tomato has a weightage of 0.6% in CPI inflation.

Tomato production in the 2022-23 crop year (July-June) has declined marginally to 20.62 million tonne compared to previous year.

Surge in tomato prices have also impacted global fast food chain McDonald, which last week announced exclusion of tomatoes in their burgers and other products.