The sudden surge in potato prices is largely due to lower production, which was also the case with onions last year.
After last year’s high onion prices fiasco, this year is again witnessing a major surge in vegetable prices, but in tomato and potato prices this time, even as annual consumer price index (CPI) inflation crossed RBI’s 4-6% upper target range in June. On Friday, tomato prices averaged Rs 50 per kg, after more than doubling from Rs 20 per kg three months ago, according to the Department of Consumer Affairs’ data. On the other hand, all-India retail prices of potato are Rs 30, from Rs 20 each three months ago. However, onion prices dipped from Rs 30 to Rs 20 per kg in this period.
While the prices of onion have fallen, potato and tomato are showing volatility. The average sale price (ASP) of onion charged by a leading online grocer has fallen from nearly Rs 78 per kg in January to Rs 36 in March, Rs 22.5 in May and Rs 20 during the current month in the national capital region, according to The Indian Express. On the other hand, the ASP for the potato has more than doubled to Rs 31 per kg since February. Similar volatility is also being exhibited by the tomato, which has also risen from Rs 30 per kg in January to Rs 22 in March and Rs 14 in May, before surging to Rs 57 in July.
What is pushing vegetable prices?
The sudden surge in potato prices is largely due to lower production, which was also the case with onions last year. In some cities, onion prices last year breached Rs 200 per kg mark due to a major supply crunch. “If there was no demand drop from lockdown, the rates would have touched Rs 23-24 per kg. They had actually gone down to Rs 15-16 in May, before recovering to the present levels,” Doongar Singh Chaudhary, a farmer-cum-cold store owner in an Agra district said.
Meanwhile, tomato prices are likely to ease once the just-planted kharif crop arrives in the market.