In India, the riddle about the tomato today is not whether it is a fruit or a vegetable — it is why it has become expensive, and ridiculously expensive.
Prices for this daily staple have skyrocketed over the last two weeks, and are now reaching almost 200 rupees ($3.50) per kilogram in parts of India — a sharp jump from the usual 40-50 rupees ($7.000-9.000). .
The high price of tomatoes has wreaked havoc on wallets, in kitchens, and even on the streets.
McDonald’s was recently in the news; not for offering a new dish but for removing tomatoes from its menu at most outlets in north and east India. They cited the unavailability of quality tomatoes “due to seasonal crop issues” as the reason.
Skyrocketing prices are especially hard on India’s middle and lower classes, which make up the bulk of its population.
Experts say bad weather conditions have damaged crops, resulting in shortages in the market and a mismatch between demand and supply. The government said that this price spike was a “temporary matter” and that it would come down in the coming months.
Some states have started selling tomatoes at reduced prices in government-run or farmer-supported outlets to help consumers. On June 30, the government of India launched the Tomato Grand Challenge Hackathon in Delhi to encourage people to share ideas to fight price hikes.
Tomato is one of the most important ingredients in Indian cooking — it is used in almost every dish. So when tomatoes became scarce and expensive, they became the subject of headlines and even political infighting.
Economists say sharp price hikes could upset India’s fragile inflation balance, pushing retail inflation towards 5.5% in July-September from 4-5% in April and May.
Ironically, almost two months ago, farmers in India dumped crates of tomatoes on the street after prices plunged to 2-3 rupees per kilo in wholesale markets as supply exceeded demand.
Farmers used the same move last year to draw public attention to their plight and, in March, farmers in Maharashtra state staged a rally demanding higher onion prices.
India often faces a supply-demand challenge when it comes to perishable but essential vegetables such as onions and tomatoes. Both crops are grown most of the year and products from different states hit the market in different months.
This year, a bountiful tomato harvest was followed by a poor harvest.
“The current tomato price problem is actually a result of the unseasonal rains during March-April-May in the tomato growing areas, particularly the Kolar belt [in southern Karnataka state], which has the largest tomato market in the country,” said Ashok Gulati, agricultural economist.
“From mid-June, supply has shrunk, while demand pressure has increased, which has led to a spike in fresh tomato prices,” he added.
Gulati said excessive rain in northwestern India would likely put further pressure on supplies.
“Significant areas have also been reeling from the floods, especially Himachal and Uttarakhand states. Supply lines during heavy rains are often displaced,” he said.
Anil Malhotra, a member of the Agricultural Products Market Committee (APMC), told PTI news agency that although the price of tomatoes increases every rainy season, he had never experienced prices this high.
“There has been a big drop in supply because of the rains. About half of our stock, which we got from Himachal Pradesh, is damaged,” he said.
Arvind Malik, a tomato farmer from Haryana state, told the Guardian newspaper that while he normally sells 30,000 kg of tomatoes every year, this year he could only harvest half as his crop had been destroyed by pests.
“Experts told us that irregular weather – the sudden rise and fall in temperature – is the reason behind the disease in our tomatoes,” he said.
So how does India address this supply-demand gap? The immediate solution is to simply save the excess crop for the rainy season.
But experts say that this is easier said than done because tomatoes are very perishable and tend to go bad after a few weeks even in cold storage.
Gulati says one way to stabilize supply is to incentivize growing tomatoes in a controlled environment to save crops from extreme heat or unseasonably heavy rains.
Another step is processing tomatoes into puree or soup, which can help consumers switch to processed tomatoes when the price of fresh tomatoes is rising. “But to promote tomato processing, the government should incentivize processing and lower the GST [general sales tax] on tomato puree from 12% – 5%,” said Gulati.
“Overall, a value chain approach should be adopted to reduce the risk of vegetables from production to consumption, but the framework is not in place now.”
Source : BBC