1 in 3 Indian households that consume tomatoes paid over INR 200 per kg last week; Findings indicate prices at all time high now

August 7, 2023, New Delhi: For over six weeks now, tomato prices have continued rising despite the central government intervention through the National Cooperative Consumers’ Federation of India (NCCF) and National Agricultural Cooperative Marketing Federation of India (NAFED). Both NCCF and NAFED have been procuring tomatoes from the southern states and making them available in several cities at subsidized rates of INR 70-90 / kg. And despite a slight reduction in the last week of July to INR 100-150/kg rates, last week again saw tomato prices soaring up to the INR 250-300/kg in major metros. All major ecommerce platforms were retailing tomatoes in the INR 200-275/kg. The Government supply program instead of gaining momentum is losing the same with no new cities being added and locations in existing cities reducing last week.

The Reserve Bank of India (RBI) in its latest monthly bulletin in July had expressed “major concern” over the spike in tomato prices, which is an offshoot of dip in supplies due to crop damage resulting from inclement weather and pest attacks in the major production belts. “Historically, tomato prices have been an important contributor to volatility in overall inflation. Its volatility also gets transmitted to prices of other vegetables in both retail and wholesale markets,” states the State of the Economy article in RBI’s Bulletin released on July 17. The report stresses that the “unhinging inflation expectations remain a major concern”. Tomato’s contribution to the CPI basket in June 2022 was 8.9%, making it the highest of the 299 commodities.

With hundreds of consumer posts reported on LocalCircles from across India last week about prices touching new heights, LocalCircles conducted a national survey which received over 11,000 responses from household consumers located in 309 districts of India. 63% respondents were men while 37% respondents were women. 43% respondents were from tier 1, 32% from tier 2 and 25% respondents were from tier 3, 4 and rural districts.

1 in 3 Indian households paid over INR 200/kg for tomatoes last week

Rich in Vitamin C, potassium, folate and Vitamin K, tomato is more in demand for the flavor and richness it adds to food rather than its nutritional value by most households. The survey sought to understand from household consumers the prices they paid last week. It asked them “What best describes the price for tomatoes that your household paid most recently?” The query received 11,565 responses with 1 in 3 households surveyed stating that they paid over INR 200 per kg for their last purchase of tomatoes. The data shows that 26% of households surveyed has paid INR 100-150/ kg of tomatoes during their last purchase; 30% had paid INR 150-200/kg for tomatoes; 23% had paid a higher price of INR 200-250/ kg and 10% of households had paid over INR 250/ kg. However, 4% of households surveyed indicated that they paid INR 70-100 per kg and another 4% were fortunate to be able to buy tomatoes for less than INR 70/ kg likely through the Government channel without realizing the same. The remaining 3% of households surveyed opted to indicate “can’t say”. In sum, 89% of households surveyed bought tomatoes for over INR 100/ kg. The data also suggested that 17% households who were earlier buying tomatoes have stopped consuming them post the surge in prices.

Feedback in community discussions also indicated customer frustration about the Government supplied tomatoes where consumers indicated that the logistics were poorly managed with only location details available and no time details thereby making people stand in line for hours waiting for tomatoes. Some indicated even facing loss of working hours as they stood in queues for couple of hours to buy tomatoes thereby giving up on buying tomatoes through the Government channel.

Percentage of households that paid over INR 100/kg for tomatoes increased from 64% to 89% in the last one week

A comparative study of the results of various surveys conducted from June 27 when 18% of households indicated that they had bought tomatoes for more than INR 100/kg, the percentage rose to 87% by July 14, after which the government agencies had started selling subsidized tomatoes. Though LocalCircles survey showed that not even double digit among the households surveyed were buying subsidized tomatoes, it nonetheless helped to ease retail prices such that by July 19th the number of households buying tomatoes for over INR 100/kg had slid to 82% and then further to 64% by July 30. The latest survey on August 6th however shows that the prices of tomatoes have again risen sharply such that 89% of households surveyed are now paying over INR 100/ kg.

In summary, it appears that the central government intervention of supplying tomatoes through NAFED and NCCF helped calm tomato prices temporarily and prices last week once again soared to touch their highest levels ever. Currently despite the government intervention still in place in some form, the new survey has revealed that 89% of households surveyed paid more than INR 100/ kg and 33% of them paid over INR 200/kg. With 17% tomato consumers pre-July 2023 already having stopped buying tomatoes due to high prices, there is a high likelihood that this number could hit 25% if prices touch INR 300/kg. Also, with the Government supply program not scaling up and locations infact reducing along with reported logistics issues, a systemic solution is what is urgently needed to drastically improve supply of tomatoes at affordable prices.