Prices of potatoes and tomatoes surge, courtesy poor crop, lockdown
While last year, prices of onions induced tears among Indian households, this year potatoes and tomatoes are responsible for the same. A staple in all houses, potato is being sold at an average of Rs. 30/kg, a sharp rise from three months ago when it was sold at Rs. 20/kg. Similarly, one kg of tomato is being sold at Rs. 50, reports Indian Express.
Prices of onions have been dipping since last few months
In sharp contrast to potatoes and tomatoes, prices of onions dipped this season from being sold at Rs. 30/kg (average) to Rs. 20/kg. An online grocer confirmed to the daily that average sale price (ASP) of onions has dipped in the last few months. In NCR, the ASP was Rs. 78/kg in January and dipped to Rs. 36/kg in March.
Prices of tomatoes have remained volatile
In May, the ASP fell to Rs. 22.5/kg and went to Rs. 20/kg in the current month. On the other hand, ASP for potatoes has more than doubled since February when it was Rs. 31/kg. The ASP of tomatoes has been highly volatile. In January, March, May, and July, it was Rs. 30/kg, Rs. 22/kg, Rs. 14/kg, and Rs. 57/kg respectively.
Owing to lesser produce, farmers didn't stock potatoes
In states like Uttar Pradesh and West Bengal, farmers deposited 36 crore bags (of 50 kg each) in cold stores, to be used for staggered sale till October-November. Last year, they had deposited 48 crore bags and the two years preceding that they kept 46 crore and 57 crore bags respectively. The figures this year indicate a lower production.
Coronavirus, and the lockdown which followed, also affected prices
A farmer-cum-cold store owner in Agra, Doongar Singh Chaudhary, said demand dipped during the coronavirus-induced lockdown. "If there was no demand drop from lockdown, the rates would have touched Rs. 23-24/kg. They had actually gone down to Rs. 15-16 in May, before recovering to the present levels," he said. He opined farmers sold merely 25% of their crops for cold storage.
Notably, prices of tomatoes surged in June
In the case of tomatoes, prices in key wholesale markets like Kolar (Karnataka), Madanapalle (Andhra Pradesh), Narayangaon, and Sangamner (Maharashtra) reached as low as Rs. 3-5/kg in the month of May. In June, prices peaked because of fewer summer crops. However, there is expectation that prices would return to normalcy when the just-planted kharif crop is harvested. Relief is expected by mid-August.
CPI inflation crossed RBI's window last month
It's pertinent to highlight that Reserve Bank of India (RBI) set the window of annual consumer price index (CPI) inflation at 4-6%. But it surged to 6.09% last month. The rise in prices of essential vegetables will make it difficult for the apex bank to cut interest rates, in the hope of bringing back growth in the economy, already suffering due to coronavirus.