Tomato prices have experienced a significant surge in the past month, with data revealing a notable regional divide in the extent of these increases. Several factors, including adverse weather conditions, increased demand, and supply chain disruptions, have contributed to this upward trend.
Across various states, retail prices have risen anywhere from 25% to 100% within a month, according to official data. The national average retail price has increased by 27% between October 19 and November 19, climbing from ₹36/kg to ₹46/kg. Some regions have experienced even more dramatic spikes. Chandigarh, for example, has seen the steepest increase at 112%. States such as Andhra Pradesh, Himachal Pradesh, and Karnataka have also registered increases of over 40% within the same monthly period.
The surge in tomato prices can be attributed to several converging factors. Excessive rainfall in October caused significant damage to tomato crops in key producing regions, leading to reduced supply. This has been further exacerbated by a reduction in the number of trucks arriving from major supply states such as Karnataka, Maharashtra, and Gujarat to key distribution centers like the Azadpur market in Delhi. Ashok Koshik, chairman of the Azadpur Tomato Traders Association, noted that truck arrivals have more than halved in the past week due to the heavy damage inflicted on crops by the excessive rainfall.
In addition to supply-side constraints, increased demand has also played a role in driving up prices. The ongoing wedding season and upcoming New Year festivities have led to heightened demand for tomatoes, further straining the already limited supply. Traders anticipate that this strong demand will likely keep tomato prices elevated in the near term.
The rise in tomato prices is occurring against a backdrop of otherwise low retail inflation. In October, a significant decline in the prices of onions, tomatoes, and potatoes had contributed to bringing retail inflation down to 0.25%, its lowest level since 2013. However, the recent surge in tomato prices threatens to reverse this trend.
The regional variations in tomato prices reflect differences in transportation costs, local production capacity, and regional demand patterns. For example, the West Coast of the United States generally experiences prices 10-15% below the national average due to California's year-round production. Conversely, the Northeast typically sees prices 12-18% above the national average due to higher transportation costs.
The current situation is creating challenges for both consumers and producers. Consumers are facing higher household expenses, with some considering tomatoes a luxury item. Meanwhile, farmers, who previously faced losses due to low prices, are now getting a fairer return, although this may not fully compensate for the crop damage they have experienced.
Looking ahead, traders expect prices to stabilize once fresh arrivals enter the market in the coming weeks. However, the extent and timing of this stabilization will depend on weather conditions and the ability of supply chains to recover from the recent disruptions. In the meantime, consumers may need to adjust their budgets and consider alternative ingredients as they navigate the current surge in tomato prices.
