A recent survey by LocalCircles, involving over 48,000 household consumers from 343 districts across India, has revealed widespread concern over rising vegetable prices amidst a severe heatwave. Consumers have reported sharp increases in the prices of staple vegetables such as onions, potatoes, and tomatoes, exacerbating the economic strain on households.
Several regions of India are grappling with this intense heatwave, which has drastically reduced vegetable supplies. Despite government efforts to curb food exports and lower import tariffs, these measures have had limited impact on the market.
While a seasonal dip in vegetable supplies is expected during summer, this year's significant reduction is primarily due to the extreme heat, with temperatures soaring 4-9 degrees Celsius above normal across much of the country. The early onset of the monsoon, which typically brings relief and aids crop growth, has slowed, resulting in an 18% rainfall deficit so far this season. This delay and inadequate rainfall have hindered the planting of summer crops, which depend on sufficient water for optimal growth.
During the bi-monthly monetary policy presentation on June 7, Reserve Bank of India (RBI) Governor Shaktikanta Das highlighted the compounded effects of the intense heat and low reservoir levels on the summer harvest of vegetables and fruits. He underscored the importance of closely monitoring the rabi arrivals of pulses and vegetables.
Food inflation has been a persistent issue for the Indian economy since 2023. Government data indicates staggering year-on-year inflation rates, with 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%. Despite these alarming figures, experts suggest that increased rainfall by early July could mitigate the shortfall and potentially bring down vegetable prices, provided the rainfall is neither too scant nor too excessive.
Tomato prices, in particular, have surged sharply in the southern states, reflecting the broader trend of rising costs for essential vegetables. The LocalCircles survey highlighted that 62% of respondents were men and 38% were women, with 42% from tier 1 cities, 27% from tier 2 cities, and 31% from tier 3, 4, and rural districts.
As India navigates the dual challenges of a lingering heatwave and delayed monsoon, the impact on vegetable supplies and prices remains a critical concern for both policymakers and consumers. The coming weeks will be pivotal in determining whether the anticipated rainfall can alleviate some of the strain on the agricultural sector and help stabilize food prices.