Rain-damaged crops, supply bottlenecks jack up tomato prices 9x in Delhi

Topics tomato prices | Rain | tomato

Meanwhile, tomato-based food processing industry is slowly witnessing an uptick in institutional demand for products like ketchup
The extensive crop damage caused by pre-monsoon showers, coupled with supply bottlenecks, has led to a surge in tomato prices in major wholesale markets.

Prices in Delhi’s Azadpur Mandi — labelled Asia’s biggest wholesale agri market — have jumped up to ten-fold over the past month, from Rs 3/kg to Rs 17.5, with higher quality tomato quoting at Rs 30-plus. In Mumbai’s Vashi, prices rose from Rs 13 to Rs 24.5/kg, in a month. Strict quarantine regulations and lockdown protocols had prevented traders and middlemen from visiting agricultural farms to contract for purchase of the crop. This disrupted the normal supply chain, comprising ready sellers and buyers. It has now resulted in the substantial hike, despite the harvest season picking up pace.

“While supply is weak from Maharashtra and the south, the Himachal border is closed and traders are avoiding travel to the state as they are required to serve a 14-day quarantine. This has led to a further cut in supplies to Delhi,” Azadpur Agriculture Produce Market Committee (APMC) member Anil Malhotra told Business Standard. He said supply would normalise in the next few weeks.
Against the daily supply of over 50 truckloads last month, supplies have dipped by above 50 per cent to below 25 trucks a day at Azadpur Mandi.

Mumbai-based trader and former director of APMC Shankar Pingle said there was short supply primarily due to the damage caused by the rains to the standing crop.


“Wholesale tomato prices at Vashi range from Rs 20-30 per kg. Prices are much steeper in Delhi, since it gets bulk supplies from distant states like Maharashtra and Karnataka,” he informed.

“At this time of year, tomato is chiefly available in Maharashtra and Karnataka only. Since loading and transportation to faraway markets like Delhi takes several days and rainfall reduces the shelf life, prices usually rise in June-July,” he observed.
According to agri ministry estimates, production is expected to jump nearly 8 per cent from 19 million tonnes (mt) in 2018-19 to 20.6 mt in 2019-20.

Meanwhile, the tomato-based food processing industry is slowly witnessing an uptick in institutional demand for products like ketchup, etc, with the gradual opening up of hotels and restaurants.

“Institutional demand for tomato-based processed food is still low, but is rising. However, household demand for these products continues to be robust,” said Kushal Arora, MD of Meerut-based Arora Foods.

Besides, major food processing units also have a ready inventory of both raw and processed tomato to suffice for 3-4 months, to insulate from any abrupt demand-supply situation that may arise.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel