Explained | Why are tomato prices still high?

Tomato prices have been volatile in India, with extreme weather conditions and low commercial realisation of the crop leading to a dip in production. Policy experts suggest improving value and supply chains, eliminating middlemen, and encouraging cultivation in poly houses and greenhouses to reduce price volatility.

The story so far: As prices of tomatoes hover between ₹100 and ₹200 in various parts of the country, the Reserve Bank of India’s latest monthly bulletin has highlighted that the volatility of tomato prices has historically contributed to overall inflation levels in the country.

Tomato production in the country is concentrated regionally in the States of Andhra Pradesh, Madhya Pradesh, Karnataka, Odisha, and Gujarat, which account for close to 50% of total production, according to Ministry of Agriculture and Farmers Welfare figures. There are two major crops of tomato annually — kharif and rabi. The rabi crop hits the market between March and August annually while the kharif crop comes to markets from September. Some regions in Maharashtra and Himachal Pradesh’s Solan are able to grow tomatoes during the monsoon months, while in the summer, Andhra Pradesh’s Madanapalle region alone accounts for tomato cultivationin the entire country. As for tomato production, it peaked in 2019-20 at 21.187 million tonnes (MT) and has been declining since. In 2021-22, it dropped to 20.69MT and 20.62MT in 2022-23.

In late June, prices of tomato doubled in retail markets within a day. According to data from the Consumer Affairs Ministry, pan-India modal price (rates at which most trades take place) in retail markets jumped to ₹40/kg on June 25 from ₹20/kg on June 24, probably the maximum rise in a single day.

In the first 24 days of June, the modal price was ₹20 per kg. In the last week of June, the modal price surged to over ₹50 per kg. On the last day of the month, it peaked at ₹100 per kg.

As on Saturday, July 15, the average all-India retail price of tomatoes was ruling at ₹116.86 per kg, while the maximum rate was ₹250 per kg and the minimum was ₹25 per kg. Modal price of tomatoes was ₹100 per kg.

There are multiple factors for the dip in overall tomato production this year, with the two key reasons being extreme weather conditions and low commercial realisation of the crop for farmers in the months before June as well as last year.

The heatwaves and high temperatures in April and May along with delayed monsoon showers in southern India and Maharashtra led to pest attacks in tomato crops. As a result, inferior-quality varieties came to markets earlier this year, fetching farmers prices ranging as low as ₹6 to ₹11 per kg between December last year and April 2023. A lot of farmers resorted to selling whatever crop they had at these prices while some abandoned their crops. This led to a crunch in supply. Later, incessant rains in tomato-growing regions further affected the new crop. The fact that July-August is a lean production period for tomato, as it falls between yields, compounded the problem. Reports show that many farmers in the Kolar district of Karnataka, which is usually responsible for sizeable tomato supplies, shifted to beans owing to the higher prices it fetched last year.