Supplies from Himachal, Uttarakhand disrupted by rains – Elevated tomato prices- No immediate respite seen

Supplies from Himachal, Uttarakhand disrupted by rains – Elevated tomato prices: No immediate respite seen

Tomato prices will continue to be elevated for another month or so owing to supply disruption caused by surplus rainfall in the hilly states of Himachal Pradesh and Uttarakhand, traders said.

As soon as the supplies from the two hilly states that have about 10% share in the country’s tomato production commenced, rainfall disrupted the transportation as well as harvesting of the crops.

“Prices are not likely to come down soon as there has been severe disruption in supplies due to heavy rains in Himachal Pradesh and Uttarakhand,” Ashok Kaushik, president, Azadpur market’s tomato association, said.

Kaushik said that supplies from hills used to improve supply during the current ‘lean’ season while bulk of supplies are currently from Karnataka.

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. On Tuesday the modal prices of tomato continue to be at Rs 100/kg although in Delhi and Mumbai retail markets, prices are in the range of Rs 140 to Rs 150/kg.

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

However, the mandi prices in Maharashtra and Karnataka, which have a combined share of 17% in production of the 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 next month,” Uday Deolankar, adviser to the Maharashtra agriculture department, said.

The benchmark mandi prices of tomato at Kolar, Karnataka, declined by 31% to Rs 4600/quintal on Tuesday from its peak of Rs 6670/quintal on June 30. At the beginning of last month, mandi prices were Rs 2000/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 had hit production and 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 the country’s 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.