Tomato prices likely to rise by 5-10%

Retail prices of tomato had touched almost Rs 80 per kg in major cities owing to short supply and transportation cost over the past few weeks following heavy downpour.

Even as tomato prices have started cooling after hitting the roof following crop losses due to flood and heavy rain in major producing states, the impact of the squeezed supply of the staple horticultural produce is likely to affect the prices of food items in its value chain such as ketchup, sauce, and puree.

Market players expect prices to increase 5-10 per cent owing to short supply and high procurement cost.

However, how much the prices will go up will be known in the coming days because most producers keep an inventory, apart from tomato paste for production.

Both the wholesale and retail prices of tomatoes have shot up over the past few weeks, especially after above-normal rain was seen in September across India, destroying agricultural and horticultural crops, including tomatoes, sugarcane, and paddy.

For example, the wholesale tomato prices in Nashik-Pimpalgaon trebled from Rs 1,200 per quintal (100 kg) on August 31 to Rs 3,555 on October 5, before cooling to Rs 1,905 on October 16.

Similarly, tomato prices in Delhi’s Azadnagar increased 171 per cent from Rs 1,387 on August 31 to Rs 3,770 on October 12, before cooling to Rs 3,121 on October 16.

The retail prices had touched almost Rs 80 per kg in major cities owing to short supply and transportation cost over the past few weeks following heavy downpour.

The prices in some mandis are still high. In Ahmedabad, it is selling at Rs 3,550 per quintal since October 14 compared to Rs 1,500 per quintal on August 31.

Nitin Seth, vice-chairman of G D Foods, a firm that manufactures and markets the Tops brand of processed food, said that the company procured tomatoes at nearly Rs 3,000 per quintal this season.

“We keep adequate stocks of tomato paste for manufacturing ketchup, etc. However, companies that do not have a robust backend supply would be the hardest hit,” he told Business Standard, and added that there could be a minor hike of 5-8 per cent in the prices of tomato-processed food products.

An executive with a Pune-based food-processing unit said it was normal for the downstream product chain of a commodity to take the burden of a higher cost of raw material.

“I expect the prices of tomato-based products to appreciate by 5-10 per cent in the coming months because there were massive crop losses owing to rain.”

Mumbai-based agro trader Shankar Pingle, who was director of the Agriculture Produce Market Committee (APMC), said the scarcity of tomatoes would persist for four-six weeks.

Photograph: Danish Siddiqui/Reuters