Tomato and potato join the onion pack as inflation rises

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This year again sees a big rise in vegetable prices after last year’s rising onion prices debacle, but this time in tomato and potato rates, even as annual consumer price index (CPI) inflation surpassed RBI ‘s upper target band of 4-6 percent in June. Tomato prices averaged Rs 50 per kg in a week, having more than doubled from Rs 20 per kg three months earlier, according to data from the Department of Consumer Affairs. By contrast, all-India potato retail prices are Rs 30, from Rs 20 every three months ago. During this time, however, prices of onions fell from Rs 30 to Rs 20 per kg.

While onion prices have dropped, potato and tomato display volatility. The average selling price (ASP) of the onion paid by a major online foodstuff is, according to the Indian Express, fell in January from almost Rs 78 per kg to Rs 36 in March, Rs 22.5 in May, and Rs 20 for the national capital in the current month. As compared to that, the ASP has almost doubled since February to Rs 31 per kg for potato. Similar volatility also exhibits from tomatoes, which further increased between Rs 30 per kg in January and Rs 22 in March and Rs 14 in May, and then to Rs 57 in July.

Awadhesh Singh, a wholesale onion trader in Delhi’s Ghazipur mandi, told ThePrint, “Transport costs have increased compared to last year, and particularly in recent days. Also, truckers and laborers have raised costs, compensating for the damages suffered during the national lockout, which has boosted prices further.

What drives vegetable prices?

The unexpected increase in potato prices is attributed in large part to reduced demand, as was also the case last year for onions. Last year, onion prices in some cities exceeded Rs 200 per kg mark due to a big supply shortage. “If there were no drop in demand from the shutdown, the rates would have hit Rs 23-24 per kg. In fact, they had gone down to Rs 15-16 in May, before they recovered to the present levels, “said Doongar Singh Chaudhary, a farmer-cum-cold shop owner in an Agra area. Besides that, the prices of tomatoes are likely to ease once the Kharif crop that has just been planted comes onto the market

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