Rising tomato prices started as a result of lower prices and as demand increased, so did traders and retailers.
In November, vegetable prices fell by 13.6% compared to last year. Along with the eggs, these were the only two things that marked the fall. However, not all pages were compatible. Tomatoes were cheap and had a high price increase of 31%. Their cost were triggered by a large gradual decline. Also, as demand increases, traders and retailers increase their brands, raising prices significantly.
High and low
India’s inflation rate, measured by the Consumer Price Index, reached 4.91% in November. The price of oil and fuel, oil and light, as well as transportation and communications rose sharply in November. On the other hand, vegetable prices fell by 13.62%.
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The chart shows the rate of inflation in November against their weight given to inflation. Two of the three most heavily priced vegetables – onions and potatoes – recorded a 30% and 45% discount respectively compared to the previous year. However, the heaviest third party, tomato, recorded a rise in prices by 31% compared to last year. No other pages are listed for price increase of more than 20%.
Cheap vs cheap
A look at inflation shows that there is no disruption to inflation figures. The chart shows vegetable prices from the last two years. Tomato prices have begun to rise since October, when onion and potato prices fell. A kilo of tomato, which bought ₹ 41 in November 2020, was ₹ 58 in November 2021 – a 42% increase.
Across the middle
The price of tomato was very expensive in both places in November and December. In Amritsar it exceeded ₹ 83 / kg in December and in Guwahati it lost ₹ 76 / kg approximately. In Bhubaneswar a kilo was sold for ₹ 70 almost in December while in Bengaluru and Lucknow it passed the ₹ 60 mark.
Arrival with signs
The rise in tomato prices in November began with a sharp drop in market share. The color lines of Charts 4A, 4B and 4C show the arrival of tomatoes in selected cities in the last few months of November. Color chart lines show average prices in November. In all cities, a clear pattern emerges on the chart – if the arrivals come down, prices go up. However, how are inflation managed, and who benefits from this? Charts 5A, 5B and 5C show the difference between the average price and the selling price in all the months between January. 2017 and Nov. 2021. As can be seen, the price difference is even higher in November 2021. This indicates that as demand increased and supplies decreased, retailers increased and sold more than they purchased. Graphs show that this is a common trend at the end of each year when stocks go down and demand more.
This diagram shows the% of transactions made by food vendors and vendors in Indian cities. Much of this was based on a 2019 RBI survey. For example, in the case of tomatoes, retailers raised the price by about 20% and retailers increased by 40%.
Farmers are not profitable
However, this does not mean that farmers have achieved huge profits, especially in terms of vegetables. RBI research results:
A common occurrence
Vegetable prices are very stable and rise at the end of the year due to food shortages. The same thing happened to the onions in September 2019, when prices exceeded ₹ 100 / kg. However, these benefits do not affect farmers. According to RBI research, farmers have found that reliable climates and good storage facilities will help achieve better prices.
Source: National Horticulture Board, MOSPI, RBI