With the onset of summer, vegetable prices have risen sharply across the country in the last two weeks. Experts say this is a ?seasonal phenomenon? and the trend is expected to continue for the next few months as demand exceeds supply.
According to an FE analysis, tomatoes are the worst-hit as retail prices have jumped as much as 70% during the last two months in most of the key metros.
The department of consumer affairs data indicate the retail price of tomatoes in Delhi was R27 a kg on Monday against R16 two months back. In all other metros, tomato prices have risen sharply during the last few weeks.
?Vegetable prices usually go up in the summer due to supply constraints. Prices are expected go up further in the next few months,? International Food Policy Research Institute (IFFRI) director (South Asia) PK Joshi told FE. Joshi said vegetable prices usually rise after a decline in kharif supplies at the start of summer.
Similarly, potato and onion prices have have started to rise. The retail price of potatoes in Delhi has risen to R14 per kg from R10 two months back.
At the Multi-Commodity Exchange, potato futures on Monday for May contract rose 2.01% to R1,165.50 per quintal. For the April contract, potato futures were quoted higher by 1.90% at R1,025 per quintal.
Analysts attribute the rise in potato futures prices to an increase in spot demand. Lower supply from key potato growing regions of Uttar Pradesh, Punjab, Madhya Pradesh and West Bengal also weighed. Similarly, even after summer crops flowed into Nashik mandis, the hub of country?s onion trade, the prices have started to appreciate.
While the wholesale price of onions ranged between R300 to R400 per quintal at Nashik, the retail price has started to rise across key cities.
?A bumper summer crop, which has already started arriving in the market, would keep the wholesale price of onions under control. However, due to increased freight rates, the retail price of onions may go up marginally,? said National Agricultural Cooperative Marketing Federation of India (Nafed) board member CB Holkar .
Although higher vegetable prices are expected to push up headline inflation, finance minister Pranab Mukherjee had last month expressed optimism that inflation would tend to stabilise in the weeks ahead.
