36% household consumers surveyed are now paying over INR 100/kg for tomato; Over INR 40/kg for onion and potato; 56% believe the Government isn’t taking corrective action to lower prices

July 26, 2024, New Delhi: Heat waves followed by erratic monsoon rains that have not improved water levels in most reservoirs have impacted several horticulture crops leading to steep jump in prices of most vegetables and fruits in the last several weeks. Food inflation in June surged to 9.4%, a five-month high, from an already high 8.7% in May, according to data released by the statistics ministry. Despite the high base of last year, the month saw higher inflation due to a steep monthly climb in prices of most food commodities including cereals, dals, edible oils and dairy products apart from fruits and vegetables. "Consumer price inflation picked up in June 2024 after three consecutive months of moderation as a broad flare-up in vegetables prices halted the overall disinflation that had been underway," the Reserve Bank of India (RBI) said in its July report on the 'State of the Economy'. The RBI further noted that inflation is approaching targets, but the pace of disinflation has slowed somewhat. "In most EMEs, inflation is steadying at or just above targets." India's retail inflation, in June, saw an uptick for the first time in five months as it accelerated to 5.08% on an annual basis in June driven by an increase in food prices. In June, food inflation, comprising approximately half of the overall Consumer Price Index (CPI) basket, rose to 9.55% from 8.69% in May and 4.55% in June 2023. Notably, vegetable prices surged by 27.33% over the preceding month.

While supplies to several mandis have been hit due to logistical issues, little or no intervention by most state governments has led to a situation where retailers are making huge profits at the cost of farmers and consumers. LocalCircles which has been tracking how consumers across the country are coping with high retail prices of vegetables particularly tomato (which is selling for over INR 120/kg in some places), potato and onion, the commonly consumed vegetables by even the poor households, has conducted a fresh survey this week. The survey received over 51,000 responses from household consumers located in 364 districts of India. 64% respondents were men while 36% respondents were women. 41% respondents were from tier 1, 22% from tier 2 and 37% respondents were from tier 3 and 4 districts.

36% household consumers surveyed are now paying over INR 100/kg for tomato; Over INR 40/kg for onion and potato

The survey asked consumers, “What best describes the per kilogram price that your household paid for tomato, onion and potato in your latest purchase?” Out of 26,440 consumers who responded to the question 8% stated that they bought “tomato for INR 150 or more, potato for INR 50 or more, onion for INR 50 or more”; 28% of respondents stated that they bought “tomato for INR 100 or more, potato for INR 40 or more, onion for INR 40 or more”; 28% of respondents stated that they bought “tomato for INR 75-100, potato for INR 30-40, onion for INR 30-40”; 19% of respondents stated that they bought “tomato for INR 50-75, potato for INR 30-40, onion for INR 30-40”; 3% of respondents stated that they bought “tomato for INR 30-50, potato for INR 30-40, onion for INR 30-40”; 3% of respondents stated that they bought “tomato for INR 30 or less, potato for INR 30 or less, onion for INR 30 or less” and 11% of respondents did not give a clear answer. In essence, 36% of household consumers surveyed are now paying over INR 100/kg for tomato; Over INR 40/kg for onion and potato.

Percentage of household consumers paying over INR 100/kg for tomatoes doubles from 18% to 36% within a week

The new survey shows that the percentage of household consumers paying over INR 100/kg for tomatoes has doubled from 18% to 36% within a week.

56% household consumers surveyed believe the Government isn’t doing anything to lower the prices of essential vegetables like tomatoes, onions and potatoes

The survey next asked consumers, “Do you believe the Government is doing all it can to lower the prices of essential vegetables like potato, onion and tomato?” Out of 25,461 consumers who responded to the question only 28% stated “yes” they believe the Government intervention is helping to lower the prices of essential vegetables but 56% of respondents stated “no” and 16% abstained from commenting. To sum up, 56% of household consumers surveyed believe the Government isn’t doing anything to lower the prices of essential vegetables like tomatoes, onions and potatoes. Unlike 2023, so far there has been no intervention via agencies like NCCF to make available tomatoes at subsidized prices in major cities this year and some citizens are questioning the reasoning.

To summarize, 36% of household consumers surveyed are now paying over INR 100/kg for tomato; Over INR 40/kg for onion and potato. In the case of tomatoes, the percentage of consumers paying such a high rate has increased from 18% to 36% in just a week. If the supplies don’t improve, tomatoes are likely to become more expensive thereby impacting household budgets. The survey also shows that 56% of household consumers surveyed believe the Government isn’t doing anything to lower the prices of essential vegetables like tomatoes, onions and potatoes. In the normal course, the government directs its agencies like NCCF to make supplies of onion and potatoes available to the public at affordable prices which has not been implemented yet.

Survey Demographics

The survey received over 51,000 responses from household consumers located in 364 districts of India. 64% respondents were men while 36% respondents were women. 41% respondents were from tier 1, 22% from tier 2 and 37% respondents were from tier 3 and 4 districts. The survey was conducted via LocalCircles platform, and all participants were validated citizens who had to be registered with LocalCircles to participate in this survey.