Understanding the recent tomato price spike: What lies ahead?

Photo for representation: iStock

The price of tomatoes has increased by 19 per cent particularly over the past two months, from January to the first week of March 2024. Prices have reached Rs 50 per kg at retail, exacerbated by weather disruptions. Before this, record-high tomato prices were observed in July and August 2023, when wholesale prices exceeded Rs 100 per kilogramme in some regions while the retail price crossed Rs 200 per kg, 

Therefore, it is imperative to analyse the current crop situation and price dynamics. As we look ahead to the coming months, it’s necessary to delve deeper into the multitude of factors influencing the pricing dynamics of this indispensable vegetable.

Read more: Rising tomato prices made ‘thali’ dearer in July; cost of platter surged by 34%

Recap of last year’s tomato turmoil

Last year, we saw a significant increase in tomato prices, particularly in West Bengal, the National Capital Territory of Delhi, Maharashtra, Haryana, Karnataka and Uttar Pradesh. There was an abrupt decline in tomato supply, attributed to adverse weather conditions and the shifting of crops towards other higher-return-giving crops, which caused modal prices to skyrocket from a modest Rs 20 per kg to a staggering Rs 200 per kg in retail by July end.

Tomato production usually declines during July-August and October-November, leading to a scarcity of the produce in the market. This scarcity exacerbates the challenges in meeting the demand for tomatoes. 

However, in response to the recent surge in tomato prices across the country, the central government has directed its agencies, including the National Agricultural Cooperative Marketing Federation of India Limited and the National Cooperative Consumers, Federation of India Limited, to swiftly procure tomatoes from marketplaces in major tomato-growing states such as Andhra Pradesh, Karnataka, and Maharashtra.

Source: Agmarknet

Analysing the current crop scenario

Tomato production comes from multiple states throughout India, albeit in differing quantities. The southern and western regions collectively account for approximately 56-58 per cent of the nation’s total tomato yield. In the Delhi-National Capital Region region, the primary source of tomato arrivals is Himachal Pradesh, Haryana and Western UP, with a smaller portion sourced from Kolar in Karnataka. 

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Now, let’s scrutinise the current state of tomato cultivation and its potential impact on future prices, considering additional factors.

Sowing area: Reports indicate a troubling decrease in tomato sowing areas across Delhi-NCR, primarily due to persistently low prices witnessed in the months leading up to now. Although there is a slight increase in overall tomato production estimated at 20.81 million tonnes for the current year, the reduced sowing areas raise concerns about potential supply shortages.

Unseasonal rainfall woes: Recent unseasonal rainfall, coupled with destructive hailstorms, has wreaked havoc on standing Rabi tomato crops in regions spanning Haryana, Western Uttar Pradesh, and parts of Madhya Pradesh. With crop damages ranging from 50-60 per cent in affected areas, worries mount over the looming threat of supply constraints in the months ahead.

Disease outbreaks: Troubles persist in regions like Western Uttar Pradesh, where outbreaks of early blight disease have plagued tomato crops, resulting in diminished fruit counts and compromised quality. Moreover, the premature conclusion of Rabi crops by mid-April in several areas exacerbates concerns over dwindling supplies.

Delayed transplanting challenges: Farmers in Madhya Pradesh voice concerns over weather-induced delays hampering the transplanting of Kharif tomato crops, leading to reduced sowing rates. This setback in cultivation activities poses a palpable threat to future tomato supplies, potentially exacerbating supply shortages in the coming months.

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Checking out the current prices: When we look at the current tomato prices, it is apparent that variations exist depending on the region. While average wholesale prices remain relatively stable at Rs 18-20 per kg in Uttar Pradesh and Delhi-NCR, counterparts in Madhya Pradesh and Chhattisgarh witness slightly lower monthly averages, hovering around Rs 18 per kg.

Considering future trends: Given the challenges faced in tomato cultivation and the historical trend of price fluctuations, there’s a possibility that the tight supply situation could persist in the upcoming Kharif tomato crop season. If this trend continues, it might mirror the pattern observed last year, where retail prices surged by a staggering Rs 260 per kg in July in Delhi-NCR.

Understanding all the bottlenecks discussed above regarding tomato production and price outlook, we can conclude that the tomato market may remain stagnant this year as well. Keeping in mind the lower crop sown area amid delayed sowing, damage reported by rains and hailstorms may repeat the price dynamics observed last year.

Arun Kumar is an agricultural economist

Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth

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