Global Economy

Tomato prices will continue to rise for next 45-50 days, says CRISIL Research


Tomato prices, which have increased by 142% on year in November, will continue to rise for another 45-50 days, says CRISIL Research.

States like Karnataka, Andhra Pradesh and Maharashtra are the key suppliers of tomato during the months of October-December. However, with excess rains in these regions (Karnataka-105% , Andhra Pradesh -40% and Maharashtra-22% higher, during the period 1st October-24th November) have damaged the standing crops and thereby reducing the supply.

“As per ground interaction, situation is so grim in Karnataka that regions like Nasik are supplying tomatoes to the state. Prices as a result have increased by 142% on year in November. It is expected that the prices will continue to rise for the next 45-50 days till arrivals from Madhya Pradesh and Rajasthan begin from January onwards,” said Hetal Gandhi, director, CRISIL Research.

She added: “Year 2021 witnessed an erratic South-West monsoon which initiated the uptick for prices of perishables. And yet again the North-East monsoon is creating havoc impacting these crops. Cumulative rains from 1st October to 24th November have been 47% higher than the normal. These excess rains have severely impacted crops like tomato, okra, capsicum to name a few, thereby resulting in increase in crop prices.”

Excessive rainfall during sowing which led to poor germination for overall vegetables followed by heavy down pour during the harvest in few key regions has resulted in sudden sharp price rise.

Sanjay Bhagat, general secretary, Gobi Shimla Traders Association from Azadpur wholesale market in Delhi said, “Tomatoes from the Bengaluru region and Raichur are no longer coming to Delhi due to the unseasonal rainfall in these areas. Tomato prices have been on the higher side for the past 20-25 days and have seen a high of Rs 75 per kg in wholesale.”

Wholesale prices of tomatoes in Azadpur are Rs 60-65 per kg. Along with squeezed supplies, increased demand for tomatoes due to a busy wedding season is keeping prices on the higher side. “The demand for vegetables is good due to the wedding season and tomatoes are used by everyone in everyday cooking,” said Rajkumar Bhatia, general secretary, Azadpur Chamber of Fruit and Vegetable Associations.

Gandhi said that the early kharif crop of Okra too witnessed damage owing to heavy rains during sowing and early vegetative stage in states like Andhra Pradesh, one of the leading producer of okra, which received 23% excess rains in the month of August. “In addition to this heavy rains in Gujarat during the fruit setting stage also added to the supply woes. Prices of okra which are 57% higher on year are expected to get tamed in the next 20-25 days with fresh arrivals,” she said.

Prices of locally grown vegetables are low in most markets of the country. Excessive monsoon rainfall had damaged green peas crop in hilly regions of Himachal Pradesh, which is keeping green pea prices higher at about Rs 70 per kg in the wholesale market in Delhi. “As the crop from Himachal was not available, now we are dependent entirely on Punjab for green peas. Looking at the damage caused by the rainfall and the demand Prices of locally grown vegetables are low in most markets of the country. Excessive monsoon rainfall had damaged green peas crop in hilly regions of Himachal Pradesh, which is keeping green pea prices higher at about Rs 70 per kg in the wholesale market in Delhi. “As the crop from Himachal was not available, now we are dependent entirely on Punjab for green peas. Looking at the damage caused by the rainfall and the demand for the wedding season, tomato prices may remain high for about a month,” said Bhagat from Azadpur.

Capsicum prices are ruling at 53 Rs/kg; 17% higher on year, again an impact of heavy rain in Karnataka that hindered the harvest and damaged the standing crop as well. However, supply from Uttar Pradesh and Chhattisgarh has started which will bring down the prices for this crop in coming 7 to 10 days. Additionally supply from Maharashtra which begins from January will help keep a further check on price,” said Gandhi.

She added, “Less talked of vegetables like cucurbits which are very sensitive to rains too have seen a sharp increase in prices. 76% and 105% higher than the normal rains (1st oct- 24th Nov’21) in key growing regions of Karnataka and Madhya Pradesh respectively have impacted the crop. Prices are 19% higher on year in November.”

According to CRISIL, rainfall will be a key monitorable for providing respite to the fiery prices.



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