Tomato prices soar to ₹80. Govt rolls out subsidy vans across Delhi-NCR

Tomato prices soar to ₹80. Govt rolls out subsidy vans across Delhi-NCR

New Delhi: India has started selling subsidized tomatoes in the national capital and will expand the operation to other parts of the countries as well to cool prices, which have surged amid crop damage caused by cyclone Montha last month, two government officials aware of the matter said.

Retail prices have crossed ₹80 per kg in several parts of Delhi, as the cyclone hit key growing regions in Andhra Pradesh and Karnataka, disrupting supplies. The ministry of consumer affairs, food and public distribution has decided to sell “Janata” brand tomatoes at ₹52 per kg through the National Cooperative Consumers' Federation of India (NCCF), the officials cited earlier said on the condition of anonymity.

The government's move comes just ahead of the winter session of Parliament, which begins on 1 December and runs till 19 December.

Supplies to Delhi, Haryana and Uttar Pradesh have tightened in recent days, pushing up wholesale and retail prices. Prices have risen sharply after heavy rains and strong winds from the recent cyclone Montha damaged tomato crops, the first official said. The subsidized sale of tomatoes is expected to expand to other parts of the country in the coming days, this official added.

This is the first such market intervention in November—an unusual move, given that large-scale tomato and onion operations are typically carried out between August and October, when seasonal shortages spike due to monsoon rains.

As per the agriculture ministry's third advance estimates for 2024-25, India's tomato output is expected to fall to 19.46 million tonnes, from 21.32 million tonnes the year prior, with Andhra Pradesh and Karnataka accounting for around 16% and 10%, respectively.

The Madanapalle region of Chittoor district in Andhra Pradesh and the Kolar–Chikkaballapur belt in Karnataka—two of India's most influential mandis for hybrid tomatoes—have reported damaged crops and reduced arrivals.

“We keep track of the prices of all essential commodities and intervene as and when required. Though arrivals of tomatoes remain normal during this part of the year, the damage to crops in key producing areas has reduced supply and created a market disruption. The sale of Janata tomatoes (which started on Wednesday) will continue until prices come down to the ₹40-50 per kg range,” the second official said.

NCCF will also be selling onions at ₹15/kg at different locations across Delhi-NCR.

Queries emailed to the consumer affairs ministry remained unanswered till press time.

The tomatoes will be sold through mobile vans and counters across prominent Delhi-NCR locations including Krishi Bhawan, Barakhamba Road, Khari Baoli, Saket, Malviya Nagar, Patel Chowk, R.K. Puram, Nehru Place, Rohini, Dwarka and Noida.

In 2024, the government had intervened twice to curb rising tomato prices. The first operation took place in July when retail rates touched ₹80-100 per kg, with discounted tomatoes sold at ₹60 per kg. A second round of intervention followed in October, when average market prices hovered around ₹100 per kg and subsidized tomatoes were made available at ₹65 per kg.

In 2023, tomato prices had surged past the ₹250 mark, prompting the government to sell tomatoes at ₹90 per kg in August. As market prices later cooled, the subsidized rate was reduced to ₹40 per kg.

“We were expecting a good harvest, but the rains have spoiled the yield. Since input costs have already risen, it will be difficult for small and marginal farmers to repay their loans,” said Sadashiv Halur, a farmer from Mulbagal taluka in Kolar district of Karnataka.

According to a senior horticulture official in the Karnataka state government, around 765 hectares of tomato crops were damaged due to unseasonal rain. The total area under tomato cultivation in the state was 39,474 hectares.

“Tomato is one of the most volatility-prone vegetables, and even small disruptions in Andhra Pradesh or Karnataka can trigger sharp retail spikes in the north. This intervention will help stabilise prices in the short term, but the larger issue is our dependence on a few belts like Madanapalle and Kolar,” said Pravesh Sharma, an agripolicy expert and former managing director of Small Farmers' Agribusiness Consortium (SFAC), an autonomous society promoted by the Union agriculture ministry.

“Unless India invests in distributed production clusters and better storage infrastructure, these price swings will continue to recur every year,” said Sharma.

As per the consumer affairs ministry data, the retail price of tomatoes in Delhi stood at ₹80 per kg on 25 November, a 66.7% increase from ₹48 per kg a year ago. A similar trend was visible in other metro cities. In Kolkata, prices rose 40.4% year-on-year to ₹73 per kg from ₹52, while in Chennai they fetched ₹75 per kg, up 87.5% from ₹40 last year.

Surprisingly, wholesale prices have remained almost flat despite the sharp rise at the retail level. Wholesale tomato prices were ₹4,182.21 per quintal on 25 November, up only 0.53% from ₹4,160.21 per quintal a year ago—a gap that indicates retail margins have widened even though mandi prices have barely moved.

“With tomatoes carrying a weight of about 0.6% in the Consumer Food Price Index, even a brief spike can introduce short-lived volatility, though headline inflation remains broadly contained,” said Abhash Kumar, assistant professor of economics, Delhi University.

“The early intervention reflects the government's concern that even a temporary spike in tomatoes—given their weight in the consumer food basket—can attract political criticism during the Parliament session. The Centre is expected to monitor supplies closely until arrivals normalise in December,” said B.B. Singh, former assistant director general, Indian Council of Agricultural Research.

“Currently, we are getting tomatoes from Nashik, and supply is short because of crop failure. However, prices are expected to ease over the next 20-25 days as fresh arrivals from Rajasthan and Punjab begin entering the market,” said Amar Thakur, proprietor of Roop Lal & Sons, a wholesale trader in Solan district of Himachal Pradesh.

Tomato cultivation in Himachal Pradesh typically spans from June to October.

India's retail inflation plunged to a record low of 0.25% in October, down from 1.44% in September and far below the central bank's projection of 1.8% for the October–December quarter.

Source: LiveMint
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