Tomato prices are through the roof—and expected to hit Rs 200 per kilo. Just months ago, farmers were throwing away tomatoes because their price had hit rock-bottom. Why do we see these wild fluctuations in vegetable prices year after year? Here's a quick explainer.
Researched by: Nirmal Bhansali & Anannya Parekh
First: Wassup with tomatoes?
There is a nationwide shortage of tomatoes—due to which their prices have jumped 400% in recent weeks. In some states, tomatoes are more expensive than petrol. In cities like Delhi and Mumbai, the prices have shot up almost overnight—from Rs 40 a kilo to Rs 160.
Things are so bad: that fast food restaurants are cutting back:
The shortage has even hit outlets of the fast-food chain McDonald’s in India. In branches of McDonald’s across north, east and south India, signs were put up to state that tomatoes would no longer be put in burgers and other dishes, due to a lack of availability.
Even thieves are jumping in the fray. A truck carrying 2,000 tonnes of tomatoes to a central market in Bengaluru was hijacked last weekend. Some have even started raiding farms.
More amusingly: A shopkeeper in Varanasi hired bodyguards for his tamatar—to “prevent haggling and altercations with angry customers arguing with him over the spiking prices.” Though it may have been a PR stunt by a Samajwadi party worker, it was still pretty funny:
Flashback to April: Just months ago, farmers were dumping their stock because the prices were too low to cover their costs—selling as low as Rs 1.50 a kilo. Farmers suffer most from this extreme price instability:
“We stopped picking tomatoes and selling them because it was a total loss,” said Malik. In June, prices began to surge as the shortages hit, but by then Malik had nothing to sell except rotten leftovers… “I had to sell my produce for less than two rupees a kilogram, and now the same is being sold for 160 rupees in the market,” said Malik. “Today, I cannot afford to buy even one kilogram of tomatoes.”
Data point to note: This is how insane our veggie prices are: “The average price [of tomatoes] in March was Rs 5-10/kg, and in April it was around Rs 5-15/kg. In May, farmers were forced to sell for between Rs 2.50-5/kg.”
So what’s up with this bizarro behaviour?
Asked about the soaring prices, a government spokesperson blithely said:
It is a highly perishable commodity. Transportation gets affected in areas that received sudden rains. It is a temporary issue. Prices will cool down soon. It happens every year during this time.
He’s not wrong. Vegetable prices in India are indeed seasonal—though tomatoes have never been this expensive. What’s left unsaid: these wild swings are due to a broken supply chain—that has become worse due to extreme weather. But let’s start with what specifically went wrong with tomatoes this year.
The harvest seasons: Typically, farming in India is divided into two seasons. The Kharif crops come to the market starting September—while the Rabi harvest supplies veggies during the summer. Tomatoes are grown throughout the year and in different parts of the country. Any disruption in either season, however, will send prices skyrocketing. This year, the culprit was the Kharif harvest.
Take the example of the Kolar mandi in Maharashtra—which supplies tomatoes between June and September. It receives 550,000 (5.5 lakh) quintals of tomatoes a year. This year, it only received 320,000 (3.2 lakh) quintals. The reason: a devastating virus.
The virus effect: Earlier this year, crops in Karnataka and Maharashtra were hit by two separate viruses—cucumber mosaic virus (CMV) and tomato mosaic virus (ToMV), respectively. Both can entirely destroy a farmer’s crops. In some cases, the plants do not bear fruit—or the tomatoes are so damaged that they are impossible to sell. This in turn affects supply in mandis like Kolar:
If there are 100 boxes of the tomato yield that we receive at the APMC yard, we get only 30 boxes today. If the yield is low, then it drives the prices up. That is why the prices have been escalating.
The virus has also affected quality: “We are not getting quality fruits that meet three important parameters — size, colour and firmness.” In fact, McDonald’s cut back on tomatoes due to quality not a shortage:
A spokesperson for a McDonald’s operator in north India confirmed they had removed tomatoes temporarily from food in some branches, due to “seasonal crop issues arising out of farm fields in a few regions” which meant there were “not enough quantities meeting our quality specifications.”
Point to note: The virus, ironically enough, also caused the glut of tomatoes earlier this year. Panicked by the virus—which caused great uncertainty in price and supply—farmers started selling their produce at rock-bottom prices. And then many did not plant a second round:
“Farmers who had standing crops abandoned them, and those who were planning to plant a second crop in March did not do so. The present price rise is the result of this double whammy,” [farmer Ajit Korde] said. Korde himself grows cane on 40 of his 60 acres, and tomato on 5 acres. But this year, he reduced his tomato holding to just 1.5 acres in March. And Bhise, who usually grows tomatoes on 3 of his 5 acres, did not give a single acre to the vegetable this year.
Come June there aren’t enough tomatoes to meet demand.
The big picture: A messed up supply chain
In theory, India can supply vegetables at reasonable prices throughout the year due to our geographical advantage:
India is the largest producer of vegetables and fruits in the world after China. There is a large diversity of crops, and they are grown in different agro-climatic conditions. This gives the country an advantage because if a crop fails in one area, it may succeed in another, ensuring a steady supply at all times. But this is possible only if there is good infrastructure and logistical support for storage and transportation of produce.
And that’s exactly what we don’t have.
The storage problem: Vegetables like tomatoes are highly perishable, but we lack proper warehousing facilities to store them. As the RBI notes, “Wastage of food products due to inefficient post-harvest practices” is one of the key causes of high food inflation in India.
Our cold storage capacity at present is only 35 million (3.5 crore) tonnes. We are short by a whopping 3-4 million (30-40 lakh) tonnes. Also: nearly 70% of the country’s storage facilities are limited to four states—Uttar Pradesh, West Bengal, Punjab and Gujarat. Worse, 70% of our cold storage capacity is dedicated to storing just potatoes.
Transport problems: There are 7,000-8,000 refrigerated trucks plying in India—but most of them transport pharmaceuticals and dairy products. Come monsoon, transport of staples like tomatoes are disrupted due to flooding. This is a disaster especially for tomatoes: “The problem is that tomatoes are highly perishable. Even with cold storage, they don’t survive for too long. Just around two weeks. Unless kept at the right temperature and humidity, it gets damaged quickly.”
Climate change: is making seasons more unpredictable—and therefore harvests are becoming more erratic. First, heatwaves killed tomato plants in March and April. Then unexpected rains in May in the north destroyed crops—and did the same in Karnataka in June. This affects all vegetables, not just tomatoes:
Heavy rains can affect the yield and quality of produce by reducing photosynthetic activity, altering metabolism and enzymatic activity. It has also affected fruits such as apple, pear, peach and plum by reducing yield and deteriorating quality, and by spreading diseases across orchards.
Point to note: Staple vegetables are the most vulnerable to climate change-driven price hikes since they are always in high demand:
The market… will essentially drive up prices of essential vegetables consumed by most of us and are critical for meeting our daily nutrient requirements. For instance, onions, tomatoes, (some) greens and green chillies. All of these are short-term crops, which require either rainfall on time or irrigation.
The bottomline: We have always had serious flaws in our agricultural supply chain—but we’ve hobbled along—accepting these wild price fluctuations as the price of living in India. But climate change may soon make that price unaffordably high.
Reading list
The Guardian has the latest overview of the tomato crisis. Finshots offers a fairly clear explainer on tomato pricing. Firstpost takes a broader view on why prices of vegetables are soaring. Deccan Herald lays out the lessons we need to learn from tomato prices—NDTV also looks at possible solutions. Moneycontrol looks at how climate change is affecting a family’s food budget. Indian Express has more on the viruses affecting tomato harvests. If you want to know more about how mandis and middlemen affect pricing, read this older Big Story we did during the farmer protests. Or look at the Big Story on lemons for more on how similar factors play out for different vegetables.
