Rising tomato prices: Next big risk to India’s fight against inflation?

Tomato prices are surging in India, putting politicians on notice as vegetables have an unusual history of toppling governments in the country.

Tomatoes, potatoes and onions form the holy trinity of Indian cooking, where they’re often mixed with spices to form the base for curries, such as chicken tikka masala. The average retail price of tomatoes in India has jumped 70 per cent from a month ago and 168 per cent from a year earlier to Rs 53.75 a kilogram as of Tuesday, according to data compiled by the food ministry.

The costs of everything from cooking oil to wheat flour have climbed in India, stoking inflation to an 8-year high in April and squeezing household budgets. The government has risked global ire by restricting wheat and sugar exports and the central bank is seen heading for another interest-rate increase this month after surprising with a hike in May. A dovish member of the central bank’s rate-setting committee has said that food prices had risen more than the monetary authorities had expected.

Soaring food prices, including tomatoes, may also have a political impact as the ruling Bharatiya Janata Party is set to face voters at the end of the year in Prime Minister Narendra Modi’s home state of Gujarat, a campaign that will set the tone for his re-election for a third time in 2024.

During Modi’s 2018 campaign, he famously said farmers are his ‘top’ priority, explaining that ‘TOP’ means “Tomato, Onion and Potato.”

There is a shortage of tomatoes currently, said Prem Bais, 36, a vegetable vendor in Mumbai. Supplies from the old harvest are dwindling and a new crop will only arrive in about three months, said Bais, who is now selling tomatoes at about 80 rupees a kilogram, up from as much as 50 rupees two months ago.

Mango prices are also rising in some areas after unusually hot weather slashed output. Prices of the popular Himsagar variety have doubled in Kolkata, the capital of West Bengal, from 50 rupees last year. Production of mangoes has slumped about 40 per cent in the state, partly due to heat waves in previous weeks, according to Kamal Dey, president of the West Bengal Vendors’ Association.

India endured a record heat wave in March and April, with temperatures in some places reaching almost 50 degrees Celsius (122 degrees Fahrenheit). The blistering heat damaged India’s wheat output, prompting authorities to restrict exports that the world was counting on to alleviate shortages caused by the war in Ukraine. India has also curbed sugar exports to protect its own supply.

“I have to pay higher prices as I can’t pick just one child to feed,” said Sushma Sonde, 38, a domestic helper in Mumbai, adding that the costs of everything have risen. “I have two children and they’re both my own.”

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor