Sharp rise in onion, potato, tomato prices

A hot, dry summer since April strained supplies of many commonly consumed vegetables, shifting demand towards potato, onion, and tomato and pushing up prices

Prices of onion and potato, two basic grocery items, continue to be stubbornly high due to lower output last year, squeezing households. Tomato rates showed a moderation in June from a year ago, but the vegetable was way costlier compared to the previous month, according to official data.

Compared to a year ago, as of June 30, average wholesale onion rates rose 106%. (HT PHOTO)

Officials are counting on robust kharif or summer planting to calm food inflation. Expanding summer sowing should have a “salutary effect” on market sentiment, which will bring down prices, an official said.

A hot, dry summer since April strained supplies of many commonly consumed vegetables, shifting demand towards potato, onion, and tomato and pushing up prices, a second official said.

Compared to a year ago, as of June 30, average wholesale onion rates rose 106%, from ₹1260.66 a quintal (100 kg) to ₹2603.55 a quintal. Wholesale potato prices leaped from ₹1076.14 a quintal to ₹2116 a quintal, an increase of 96%.

On an annual basis, wholesale tomato prices in June declined 40%, from ₹5680.75 a quintal to ₹3368.28 a quintal. However, compared to the previous month, wholesale rates climbed 112.39%, from ₹1585.84 per 100 kg to ₹3368.28, indicating volatility.

Vegetables have a weight of 6% in the consumer inflation basket. According to an HT analysis, the three items make up 44% of a household’s monthly spending on vegetables.

Retail prices have also edged up. The countrywide modal rate (a type of average) of onion on July 2 stood at ₹42.21 a kg, up 81% from a year ago, when the price was ₹23.29 a kg.

The retail rate of potatoes has risen 57% from a year ago, from ₹21.91 a kg to ₹34.4 a kg. Consumer prices for tomatoes on June 2 declined 15%, from ₹64.5 a kg to ₹54.42. However, compared to a month ago, the vegetable rose a sharp 71%, from ₹31.74 a kg to ₹54.42 a kg.

Last year in August, retail onion prices quadrupled, prompting the government to start selling subsidized onions to the public. Onion output dropped 20% in 2023 due to irregular rainfall. The lingering impacts of a poor monsoon last year then crimped production of rabi or winter-sown onions in 2024 by another 20% to 19 million tonne, compared to 23.7 million tonne in the previous year. Rabi onion is critical because it supplies up to 75% of the country’s annual supply.

The world’s largest onion producer banned export of the item in December last year, which was lifted on May 4. Exports were allowed with a 40% duty.

Blistering temperatures and falling reservoir levels since April have impacted the output of seasonal vegetables whose stocks are not federally monitored, such as okra, gourds, beans, cabbage, and turnips. Heat waves have led to significant spoilage of fresh vegetables, according to traders, impacting prices.