Over 50% price surge in vegetables hits Mumbai households hard, restaurants mull price hike

The surge of over 50% in vegetable prices since May has sent household budgets into disarray and food inflation to an all-time high

NAVI MUMBAI/MUMBAI: For over a month now, Priyanka Prasad has been replacing tomatoes with tomato puree to cook meals as according to the Chandivali resident, paying ₹120 for a kg of tomato is untenable since it barely lasts two days in her joint family household. Since May, the cost of 1kg of tomatoes in the retail market has more than doubled – from ₹40 in May to ₹80 in June, and currently at ₹100. In the wholesale market too, the price of this vegetable has shot up from ₹30 to ₹60, and is currently at ₹80.

The surge of over 50% in vegetable prices since May has sent household budgets into disarray and food inflation to an all-time high. (AP file photo)

A difficult scenario for Indian households as tomatoes are an integral ingredient of almost all meals that are prepared daily. Hence, people are looking at cheaper alternatives, as in the case of Ms. Prasad. “I have switched to canned tomato puree, which is cheaper at ₹27 for 200 gram. Although we have to compromise with the flavour, we have accepted it as we have to manage with what we can afford,” she said.

The surge of over 50% in vegetable prices since May has sent household budgets into disarray and food inflation to an all-time high. The restaurateurs, who have been facing the heat of escalating prices, say that they will be forced to increase their menu prices soon.

The business community is a worried lot these days. Shyam Shetty, vice president of the Federation of Hotel and Restaurants Association of Maharashtra, said that the surge in prices of food items has forced them to think about hiking their rates by 5-10% to offset some increase at least in the costs. “It is not an easy task in times of increased competition when we are already losing customers. It is a catch-22 situation for us. The industry seems rosy from outside, but we are bleeding,” he said.

The early onset of monsoon in parts of the state leading to incessant rains in some and little rain in others has hit the vegetable crop hard. Damage during transportation of the highly perishable commodities has added to reduced arrivals at the wholesale market, leading to a spurt in the prices. The wholesale APMC market in Vashi, that supplies vegetables to the Mumbai Metropolitan Region (MMR), has witnessed a price hike of over 50% since May. The retail situation is reven worse with prices shooting up by up to 100% in some cases.

Kailash Tajne, vegetable wholesaler, APMC, said that in the Nashik district, which alone takes care of over 80% of the vegetable supply to Mumbai, there has been an increase of at least ₹10 per kg which goes up to ₹50 per kg depending on the availability of the vegetable.

There have been heavy rains in some areas of the district while other areas have had absolutely no rain. A lot of crops were destroyed in the fields due to the excessive rains and inclement weather. Vegetables also get damaged in transportation during monsoon, and have to be thrown away,” said Tajne.

Ashok Karpe, a wholesaler of onion and potato, said that the farmers have exhausted their stock. “The produce coming to the market now is from NAFED (National Agricultural Cooperative Marketing Federation of India) and middlemen who have holding capacity, and therefore supply limited quantities for maximum profit. The market should remain stable now with minor increases till Diwali, when fresh stock is expected in large quantities,” he said.

Sukesh Shetty, president of Indian Hotels and Restaurant Association, said that the sharp increase in tomato and onion prices is not new. “Restaurant owners are generally prepared for such temporary periods. It’s been about 15 days since this heavy price hike began. We’re all waiting for the prices to go down while trying to hold the fort,” he said, adding also a word of caution: “If prices remain high for a long time, it could lead to higher menu prices.”