7 in 10 household consumers surveyed indicate that their weekly spending on vegetables has increased by 25-100% in the last few weeks; Most buying tomatoes now for 50-100/kg

June 27, 2024, New Delhi: A lingering heatwave in several parts of India has drastically reduced the supply of vegetables. Efforts to curb food exports and lower import tariffs have had limited impact. While vegetable supplies typically dip during summer, this year's reduction is more due to the heatwave with temperatures 4-9 degrees Celsius above normal in most parts of the country. Despite an early start, the monsoon's momentum has slowed, resulting in an 18% rainfall deficit so far this season. The delay and inadequate rainfall so far in some parts of the country has delayed planting of summer crops, which require adequate rainfall for optimal growth. While presenting the bi-monthly monetary policy on June 7, Reserve Bank of India (RBI) Governor Shaktikanta Das cautioned that the extremely hot summer and low reservoir levels could further strain the summer harvest of vegetables and fruits. He emphasized the need for closely monitoring the rabi arrivals of pulses and vegetables.

Food inflation has been impacting the Indian economy since 2023. Government data shows year-on-year inflation rates as follows: vegetables at 28%, pulses at 17%, cereals at 8.6%, meat and fish at 8.2%, spices at 7.8%, and eggs at 7.1%. Will Monsoon Help in Reducing Prices? However, experts believe that any shortfall can be largely mitigated if rainfall increases by the first week of July. Going ahead the prices of vegetables may come down if supplies are not affected by too little or too much rainfall in July. In the southern states the prices of tomato for example has risen sharply.

Since posts and comments from household consumers continued to pour for third week in a row on high vegetable prices, LocalCircles conducted a second survey of the season to find out how consumers are faring as the prices of onion, potato and tomato – the basic vegetables used in most households – continue to rise. The survey received over 48,000 responses from household consumers located in 343 districts of India. 62% respondents were men while 38% respondents were women. 42% respondents were from tier 1, 27% from tier 2 and 31% respondents were from tier 3, 4 and rural districts.

64% household consumers surveyed confirm paying INR 50/kg or more for tomato, INR 30/kg or more for potato and INR 30/kg or more for onion; 21% of them paid over INR 100/kg for tomato

Going by national and local media reports, there are huge variations in prices of vegetables across the country. The survey first asked consumers, “What best describes the per kilogram price that your household paid for tomato, onion and potato in your last purchase?” Out of 25,761 consumers who responded to the question 21% stated “Tomato INR 100 or more, Potato INR 50 or more, Onion INR 50 or more”; 18% of respondents stated “Tomato INR 75-100, Potato INR 30-50, Onion INR 30-50”; 25% of respondents stated “Tomato INR 50-75, Potato INR 30-50, Onion INR 30-50”; 18% of respondents stated “Tomato INR 30-50, Potato INR 30-50, Onion INR 30-50”; 11% of respondents stated “Tomato INR 30 or less, Potato INR 30 or less, Onion INR 30 or less”; and 7% of respondents did not give a clear answer. To sum up, 64% of household consumers surveyed confirm paying INR 50/kg or more for tomato, INR 30/kg or more for potato and INR 30/kg or more for onion; 21% of them paid over INR 100/kg for tomato.

A comparison of prices shows that in the last one week alone per kilogram paid for tomato by 2 in 3 consumers has risen from INR 30 or more to INR 50 or more

7 in 10 household consumers surveyed indicate that their weekly vegetable spending has increased by 25-100% in the last few weeks due to higher prices

When prices rise, many households in the cities particularly make do without any pulses and most vegetables. Unless due to health conditions or taste, most families make do with onion, tomato and potatoes. The survey next asked household consumers about impact on weekly spending on vegetables, “How much has your weekly household vegetable spending (for the same items) increased as compared to prior weeks due to higher prices?” Out of 22,781 consumers who responded to the question 18% indicated that it has “increased by 100% or more”; 14% indicated that it has “increased by 75-100%”; 225% indicated that it has “increased by 50-75%”; 16% of respondents indicated that it has “increased by 25-50%”; 12% of respondents indicated that it has “increased by 10-25%”; and 7% of respondents indicated that it has “increased by up to 10%”. However, 2% of respondents stated that there has been “no increase for us luckily”; 2% of respondents stated, “we have stayed within our budget and reduced purchase quantities” and 7% of respondents did not give a clear answer. In essence, 7 in 10 household consumers surveyed indicate that their weekly vegetable spending has increased by 25-100% in the last few weeks due to higher prices of vegetables.

In summary, within the last one week alone, per kilogram price paid for tomato by 2 in 3 consumers has risen from INR 30 or more to INR 50 or more. In some states it has crossed INR 100/kg. The situation is such that 7 in 10 household consumers surveyed indicate that their weekly vegetable spending has increased by 25-100% in the last few weeks due to higher prices. If the monsoon does not deliver better than normal rains during July, when most of the sowing is done in rain-fed areas, or if it rains too much where vegetables are grown, the situation is likely to worsen as far as vegetable supplies and prices are concerned. Local authorities may need to step in to prevent profiteering and Department of Consumer Affairs may need to intervene via NCCF in making these vegetables available at subsidized prices in districts that are currently experiencing abnormally higher prices.