Govt slashes price of subsidised tomato to ₹70 per kg

The central government on Wednesday further slashed the retail price of tomatoes sold through its two cooperatives—the National Cooperative Consumers Federation (NCCF) and National Agricultural Cooperative Marketing Federation of India (NAFED).

The Department of Consumer Affairs has directed NCCF and NAFED to sell tomatoes at retail price of ₹70 per kg rate from July 20, 2023, in view of the declining trend in tomato prices, the Ministry of Consumer Affairs, Food & Public Distribution says in a statement.

The tomatoes procured by NCCF and NAFED had been retailed, initially, at ₹90 per kg and then reduced to ₹80 per kg from July 16, 2023. The government says the reduction to ₹70 per kg will further benefit the consumers.

To be sure, retail prices of tomatoes in several parts of the country are still hovering around ₹200 per kg.

On the direction of the Department of Consumer Affairs, NCCF and NAFED had commenced the procurement of tomato from mandis in Andhra Pradesh, Karnataka and Maharashtra for simultaneous disposal in major consumption centres where retail prices have recorded maximum increase in the last one month. The retail sale of tomatoes in Delhi-NCR started from July 14, 2023. Till July 18, 2023, a total of 391 MT of tomato had been procured by the two agencies which are being continuously disposed of to the retail consumers in major consumption centres of Delhi-NCR, Rajasthan, UP and Bihar.

The Reserve Bank of India (RBI) on Tuesday said that spillovers from tomato price spikes to prices of other commodities and unhinging inflation expectations remain a major concern. Historically, tomato prices have been an important contributor to volatility in overall inflation, the central bank says in its monthly bulletin. This volatility also gets transmitted to prices of other vegetables in both retail and wholesale markets, it adds.

The recent spike in tomato prices on account of crop damage due to inclement weather and pest attacks in the major production belts has received widespread attention as it has taken a toll on households’ budgets, the RBI says.

Increasing amplitudes of price spells over the years calls for improving the supply chains to contain overall inflation volatility, the banking regulator says.

Tomato, being a highly perishable item with a very short crop duration, exhibits considerable seasonal variation in prices but these episodes are short lived, says the RBI. The average duration of a high price episode shows that prices stay above ₹40 for an average duration of 2.6 fortnights whereas prices remain below ₹20 for an average duration of 10 fortnights, it adds.

“High frequency food price data for July so far (up to 12th) point to a sustained increase in cereal prices. Prices of pulses and vegetables recorded a general uptick with tomato prices registering the maximum increase. Edible oil prices continued to slide down in line with the fall in global prices,” the RBI says.